Prime Minister Shehbaz Sharif has approved a proposal to approach the International Monetary Fund (IMF) for permission to abolish the super tax and reduce the income tax rate for salaried individuals by five percent.
The prime minister chaired a meeting on Saturday to review several proposals that will be presented to the IMF next week as part of the government’s plan to ease the tax burden on citizens.
According to sources, the government intends to remove the super tax currently imposed on wealthy individuals and the corporate sector. Following the prime minister’s approval, the proposal will be taken to the IMF for consideration.
The government is also considering reducing the maximum income tax rate for the highest salaried income group by five percent, bringing it down to 30 percent. In addition, officials are discussing an increase in the income slab where the new rate would apply.
Sources said the prime minister instructed tax authorities to further refine the proposals with the help of private sector consultants before presenting them to the IMF.
Officials added that the government initially aimed to reduce taxes in the range of Rs. 1.5 trillion to Rs. 1.8 trillion, though it is unlikely that the IMF will allow such a large fiscal adjustment.
