ISLAMABAD, June 25(ABC): The coalition government Friday announced a revised tax deduction criteria for the salaried class on the demand of the International Monetary Fund (IMF) withdrawing relief given on June 10.
According to a report published Saturday, the tax collection target of the Federal Board of Revenue (FBR) for the fiscal year 2022-23 has been increased to Rs7,470 billion — an addition of Rs466 billion.
The government, to collect the amount, took some drastic measures by increasing the tax rate on high-income earners to fetch Rs120 billion for poverty alleviation and Rs35 billion by raising tax rates for the salaried class.
The government slapped a 10% super tax on 13 high-earning sectors with a revenue impact of Rs80 billion for the next financial year 2022-23.
The exchange rate depreciation will also help the FBR to collect more taxes at the import stage in the budget for 2022-23, so with help of all these taxation measures, the tax collection target will be increased up to Rs7,470 billion.
Revised tax slabs
On Personal Income Tax (PIT), the government raised a tax amount of Rs80 billion as first the government abolished tax relief of Rs47 billion and then raised a tax amount of Rs35 billion, so the FBR was going to collect Rs235 billion from salaried class in the next budget against a collection of Rs200 billion in the outgoing fiscal year.
The PTI-led government had made a commitment with the IMF for raising the tax amount of Rs335 billion through an increased rate of slabs for the salaried class but the PDM-led coalition government convinced the IMF for collecting Rs100 billion less than agreed by the previous PTI-led government with the IMF.
For the salaried class, the government proposed a tax rate of 2.5% for income brackets of Rs50,000 to Rs100,000. For income earners from Rs100,000 to Rs300,000 on monthly basis, the proposed tax rate jacked up to 12.5%.
Where the taxable income exceeds Rs3,600,000 but does not exceed Rs6,000,000, the FBR proposed to jack up the tax rate from 17.5% to 20%. Where the taxable income exceeds Rs6,000,000 but does not exceed Rs12,000,000, the FBR tax rate is proposed to be increased from 22.5% to 25%.
Where the taxable income exceeds Rs12,000,000, the FBR will charge a tax amount of Rs2,004,000 plus 32.5% of the amount exceeding Rs12,000,000 on a per annum basis. For the above income, the FBR proposed a tax rate of 35%.
