Did recommendations in Budget FY2025-26 help salaried Pakistanis?

WEB DESK: Finally passing the federal budget FY 2025-26 the government has apparently unveiled sweeping income tax reforms in its 2025-26 budget, offering significant relief to Pakistan’s salaried class.

Workers earning up to Rs50,000 monthly will continue paying zero income tax, while those in the Rs50,001-100,000 bracket see their tax rate slashed from 5% to just 1% – reducing their maximum monthly payment from Rs2,500 to a flat Rs500.

National Assembly passes Rs17.57tr budget for FY2025-26

Middle-income earners (Rs100,001-183,333) can benefit from reduced progressive rates (11% vs previous 15%), capping their monthly tax at Rs9,666.

The revised structure maintains progressivity for higher earners, with those making over Rs341,667 facing a 35% rate on excess income. These changes, effective July 1, aim to boost disposable income for low and middle-class workers while simplifying Pakistan’s complex tax system through a hybrid fixed-progressive model that could put thousands back in taxpayers’ pockets annually.