Significant tax reduction recommended for salaried class

ISLAMABAD: A proposal for major relief for the salaried class has emerged regarding the upcoming federal budget, under which a significant reduction in tax rates has been recommended in various sectors.

Economic think tank Economic Policy and Business Development has submitted budget proposals to the government.

According to the proposals, it has been recommended to reduce the current tax rate on the salaried class from 35 percent to 20 percent.

In addition, a proposal has been made to reduce the corporate tax rate from 29 percent to 25 percent. A major relief has also been proposed for the non-salaried class, under which a recommendation has been made to reduce the tax rate on them from 45 percent to 25 percent.

Further proposals said that tax exemption should be given to people earning Rs 80,000 per month so that the financial burden on the low-income class can be reduced.

The think tank has also suggested that the sales tax rate be reduced from 18 percent to 15 percent in the next three years.

To document the economy and widen the tax net, retailers, merchants and vendors have also been recommended to be included in the tax net. A major relief has also been proposed for the real estate sector, under which taxes have been proposed to be reduced from 5.5 percent to 0.5 percent.

Furthermore, it is also recommended not to ask industrialists who invest 100 percent about their sources of income and to provide special incentives for those who send remittances and investors.

Economic experts say that if these suggestions are implemented, it may be possible to increase investment and business activities in the economy.