Punjab Committee Approves Major Tax Relief for Salaried Individuals
The National Assembly’s Standing Committee on Finance has once again revised the income tax structure for salaried individuals, introducing new changes aimed at providing relief to middle-income earners. This decision comes at a time when rising inflation and living costs have placed extra pressure on household budgets across Pakistan.
According to the new proposal, the tax rate for the income slab between 6 to 12 lakh rupees per year will be reduced from 2.5% to just 1%. In simple terms, employees who fall under this category will now pay a smaller portion of their income as tax. As a result, they will be able to save more or spend more on essential needs, which may also help stimulate the economy.
Financial experts believe that this decision reflects the government’s growing recognition of the challenges faced by Pakistan’s working class. Moreover, they say the reduction in tax rates will directly benefit millions of workers employed in both the public and private sectors. Therefore, it could play a key role in restoring confidence among salaried citizens who often feel overburdened by taxes and underpaid compared to rising living expenses.
However, analysts caution that while this tax relief offers immediate benefits, it might reduce short-term government revenue. They suggest that the government must now find ways to balance the tax reduction by improving tax collection efficiency and expanding the overall tax base. For instance, bringing more high-income individuals and large corporations into the tax net could help maintain fiscal stability.
In conclusion, the reduction in the income tax rate for salaried individuals is a positive and timely step. If implemented effectively and supported by broader economic reforms, it could ease financial pressure, increase consumer spending, and contribute to Pakistan’s long-term economic growth.