After receiving complaints from the International Monetary Fund, Pakistan is left with little choice but to consider revisions to the new income tax brackets for the salaried class in the budget FY2022-23 (IMF).
The planned Rs.47 billion tax decrease in Personal Income Tax (PIT) is utterly unacceptable to the IMF, according to reliable sources.
The International Monetary Fund (IMF) highlighted reservations about the proposed income tax rates, which would allow the Federal Bureau of Revenue (FBR) to assist persons earning up to Rs.1,200,000 per year.
The lender wants the coalition government to limit tax cuts to those earning up to Rs.200,000 per month, redistributing relief to urban and middle-class households and then raising tax rates across the board.
The FBR raised the taxable ceiling limit from Rs.600,000 to Rs.1,200,000 in the Finance Bill 2022 and the number of slabs was lowered from 12 to 7 under the proposed regime.
The only way out of the IMF impasse would be to make changes to the proposed slabs, as this would be a critical component of achieving an agreement with the international organization. According to experts, financial aid should be confined to people earning up to Rs.200,000 per month.