Business

Budget 2022-23: Tax relief to salaried class taken back on IMF’s demand

Budget 2022-23: Tax relief to salaried class taken back on IMF’s demand

Official sources confirmed that the administration has decided to revoke the considerable tax reduction offered to the salaried class in its planned federal budget for 2022-23.

The government unexpectedly provided considerable tax relief to persons with higher salaries in the recently proposed budget by lowering the maximum tax rate from 35 percent to 32.5 percent. The number of slabs was also cut from 12 to seven in the proposed budget.

The new tax slabs, as well as other ideas, have been submitted to the International Monetary Fund, according to the official (IMF). “In the coming days, technical level talks will begin,” the official said, adding that they would “attempt to protect the salaried class sliding into lower slabs.”

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In Islamabad, the Fund’s representative acknowledged that they were in “discussions with the authorities… to seek additional clarity on specific revenue and spending items.”

“We notice the submission of the deficit budget to the National Assembly last Friday,” IMF Resident Representative Esther Perez Ruiz stated in response to written inquiries. However, she stated that additional actions will be required to strengthen the budget and bring it in line with major programme objectives, according to early IMF assessments.

“Fund staff stand ready to continue to support the authorities’ efforts in this regard, as well as in the execution of measures that promote macroeconomic stability more broadly,” she said.

RELATED: Income tax calculator salaried class in Budget 2022-23

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Sibtain Ali is a Senior Editor Business at Pakistan Lounge and joined in October 2021. Formerly business editor at a renowned International News website

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