What is the new proposed tax rate by IMF on the salaried class of Pakistan?

by admin
0 comment
 imf conditions for pakistan,

What is personal tax?

The IMF has called for reforms in personal income tax. It means increasing the rate of income tax on the salaried class. Personal tax reform means the IMF wants to increase taxes on high-paid individuals.” It should be noted that the IMF’s demand for higher tax collection from the salaried class is not new. It has been demanded before, but the PTI government did not agree to this demand.

U-turn on Relief

In the budget presented on June 10, 2022, the salaried class was given a relief of Rs 47 billion by reducing the tax rate so that they could get some relief in the era of inflation. But now, the government has revoked the tax rate on the salaried class at the request of the IMF, not only withdrawing the relief of Rs 47 billion but also an additional Rs 33 billion will be collected from this class.

In this era of inflation, this tax will put more burden on the salaried class at a time when the government is going to impose a petroleum levy from next month.” When Finance Minister Miftah Ismail presented the budget on June 10, 2022, there was a tax exemption for the salaried class people who are earning Rs. 600,000 per annum. 

After the presentation of the federal budget, when negotiations took place with the International Monetary Fund (IMF) of Pakistan, the international body asked Pakistan to set an annual tax target of Rs 7,400 billion instead of the annual tax target of Rs 7,000 billion. 

The government has taken some other steps to raise Rs 400 billion in additional taxes, including a 10 percent super tax on 13 major industrial sectors. It has also changed the tax rate for the salaried class. In the budget to be presented on June 10, the tax slabs on the salaried class will remain seven, but the tax rate on them has been increased so that an additional Rs 33 billion can be collected through it. In this regard, people with an annual income of Rs. 12 lakh will pay 2.5% of their income tax instead of 100 rupees only. 

What was proposed for the salaried class in Finance Bill 23-2022?

According to the Finance Bill introduced on June 10, 2022, the number of income tax slabs was reduced from 12 to seven. The first slab includes persons whose salary is up to Rs. 600,000 per annum. No income tax applies to them. The second slab is about people with an annual income of more than 600,000 but up to 1.2 million. Such people only had to pay an annual tax of Rs 100, apparently an attempt to bring them into the tax net.

The third slab is for those with an annual income of Rs 1.2 million to Rs 2.4 million. For those earning more than Rs 1.2 million, it was proposed to levy tax at a fixed rate of 7%. The fourth slab is for those whose annual salary is more than Rs 2.4 million and up to Rs 3.6 million. The fifth slab is for those with an annual income of Rs 3.6 million to Rs 6 million, who were proposed to pay 234,000 fixed tax and 17.5 percent tax on income over Rs 3.6 million.

The previous finance bill had a single slab for those earning more than Rs 6 million, but this finance bill has changed it. The sixth slab is for those with an annual income of Rs 6 million to Rs 12 million, who were proposed to pay 654,000 fixed tax and 22.5 percent tax on income above Rs 6 million.

The seventh and final slab is for those whose annual income is more than 12 million. They proposed paying 2 million four thousand fixed tax and 32.5 percent tax on income over 12 million.

What is the new proposed tax rate on the salaried class?

A new tax rate on the salaried class has been proposed to collect additional taxes under IMF conditions, but the number of slabs has been kept at seven. The first slab includes persons whose salary is up to Rs. 600,000 per annum. No income tax applies to them. The second slab is about people with an annual income of more than 600,000 but up to 1.2 million. Such people will have to pay 2.5% tax. In addition to the 15,000 fixed tax on annual income of Rs 1.2 million to Rs 2.4 million, 12.5 percent tax will be levied on income above Rs 1.2 million.

The fourth slab is for those whose annual salary is more than Rs 2.4 million and up to Rs 3.6 million. The fifth slab is for those with an annual income of Rs 3.6 million to Rs 6 million, who are proposed to pay a fixed tax of Rs 4.5 million and 25 percent tax on income above Rs 3.6 million. The sixth slab is for those with an annual income of Rs 6 million to Rs 12 million, who will now have to pay a fixed tax of Rs 1,050,000 and a 32.5 percent tax on income over Rs 6 million. The seventh and final slab is for those whose annual income is more than 12 million; they will now have to pay 29.55 million fixed tax and 35% tax on income over 12 million.

Read more

Super tax in pakistan. Can Pakistan Industry survive in 39% tax ratio ?

Prime Minister Shahbaz Sharif said that Pakistan-IMF agreement had been almost fixed with the IMF.

No country or company is willing to provide fuel to Sri Lanka. Even not from cash payments

Can NAB Ordinance Amendment bill 2022 be implemented without approval from President Alvi?

Pakistan gas reserves? Why is Pakistan not importing Gas from Russia?

imf conditions for pakistan, imf conditions for pakistan, imf conditions for pakistan,imf pakistan news,imf pakistan news,imf pakistan news,imf bailout pakistan,imf bailout pakistan,imf bailout pakistan,imf package for pakistan,imf package for pakistan ,imf package for pakistan

You may also like

Leave a Comment

Our Company

Officerswiki is a Professional Education Platform. Here we will provide you only interesting content, which you will like very much. We’re dedicated to providing you the best of Education material, with a focus on dependability and education for all .

Newsletter

Subscribe my Newsletter for new blog posts, tips & new photos. Let's stay updated!

Laest News

@2023 – All Right Reserved. Officerswiki