Islamabad: Prime Minister Shehbaz Sharif has directed officials to negotiate with the International Monetary Fund (IMF) on implementing a proposed Rs975 billion tax relief package, aimed at easing burdens on businesses and the salaried class. The recommendations, presented by a private-sector-led panel chaired by Shehzad Saleem, include a 25% reduction in taxes for salaried individuals, abolition of the 10% income surcharge on earnings over Rs10 million, and elimination of the wealth tax on foreign assets via capital value tax.
The package’s immediate relief is estimated at over Rs600 billion, with key proposals prioritizing the scrapping of super tax (Rs190b relief), halving the minimum income tax rate before full elimination (Rs160b), ending the 15% corporate dividend tax (Rs80b), and reducing corporate income tax to 25% over two years (Rs170b). Additional measures involve abolishing provincial cesses like Sindh’s 1.9% and Punjab’s 0.9% infrastructure levies, advance income tax on exporters, workers’ welfare and participation funds (Rs50b combined), and withholding taxes on goods and services (Rs175b).
Due to IMF program constraints, implementation hinges on lender approval. Sharif formed a committee under Finance Minister Muhammad Aurangzeb to develop an actionable roadmap. Sources highlight a growing consensus among government, military, and business leaders that such reforms are essential for economic growth, alongside lowering energy costs to regional levels. The PM emphasized that robust businesses are key to generating revenue and driving export-led expansion, amid criticisms of excessive taxation stifling industry.