• Up to 80pc tax relief for salaried individuals earning Rs600,000-1.2m annually
• Minimal relief for top salary brackets earning above Rs4.1m
• 1pc surcharge reduction for income above Rs10m to curb brain drain
• Super tax cut by 0.5pc for companies earning Rs200m-500m
• Pensions above Rs10m to be taxed at 5pc
• Cash withdrawal tax for non-filers increased to 1pc from 0.6pc

ISLAMABAD: The government has announced sweeping tax reforms in the federal budget 2025-26, offering tax cuts of up to 80 per cent for low-income salaried individuals while limiting relief for higher earners to just 3pc. A new 5 per cent tax has also been proposed on high-value pensions exceeding Rs10 million annually.

The focus of the budget seems to balance sectoral rel­ief, expand tax scope, achieve equitable burden-sharing, and introducing strong enf­orcement measures. The government expects the digital taxation framework, carbon levies and tax enforcement on e-commerce and digital transactions to help Pakistan adapt to global financial regulation standards.

Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial said tax relief measures total Rs60 billion for salaried individuals, Rs2.4bn for the corporate sector, and Rs60bn in exemptions for fertilisers and pesticides.

To achieve the proposed tax collection target of Rs14.131 trillion, the autonomous tax growth is projected at Rs1.34tr in FY26 based on the GDP growth target of 4.2pc and inflation rate of 7.5pc.

With the current year’s revenue collection of Rs11.5tr and autonomous growth of Rs1.345tr, revenue collection will reach Rs12.845tr in FY26 without any new tax or enforcement........

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