Income tax reduction for salaried class in the budget

ISLAMABAD: Budget 2026-27 will be presented next month, for which important proposals have been sent to the Ministry of Finance. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has sent proposals to the Ministry of Finance for the budget for the financial year 2026-27.

In which other important proposals have been made, including reduction in income tax for the salaried class, abolition of super tax.

The FPCCI has demanded a 5 percent reduction in income tax imposed on the salaried class in the next financial year and has proposed reducing the tax rate from 36 percent to 30 percent.

In addition, proposals have been made to abolish the 9 percent surcharge on the salaried class and increase the non-tax slab from 600,000 to 120,000.

The Federal Chamber of Commerce has also recommended restoring the Final Tax Regime (FTR) for goods exporters to boost exports, and maintaining the 25% export tax rate imposed on the IT sector in the budget until 2035.

The budget proposals also include recommendations to increase the SME turnover limit from $250 million to $500 million, link it to the CPI, and reduce the income tax rate for manufacturers from 29% to 20%.

FPCCI President Atif Ikram says that with a long-term policy, IT exports are likely to increase from $3.8 billion to $10 billion. Super tax is a disincentive to investment, so the super tax should be completely abolished in the budget.

The FPCCI President added that Pakistan’s economy faced significant difficulties in 2022. Now, thanks to the tireless efforts of the Prime Minister and the Field Marshal, Pakistan is on a successful journey towards economic stability.

He said that the achievements on the diplomatic front should be converted into substantial economic benefits for Pakistan. The government, FPCCI and the business community can together solve all economic challenges and difficulties. I am confident that the federal budget 2026-27 will reflect Pakistan’s strong diplomatic profile.