Shehbaz Sharif orders massive tax cut for salaried class

Islamabad: In a major relief, Prime Minister Shehbaz Sharif has issued instructions to reduce the tax rate for the salaried class.

Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial said this while addressing a seminar organised by the Pakistan Business Council in Islamabad.

Langrial said that following the prime minister’s directive, work has formally begun to provide tax relief to the salaried class in the next fiscal year’s budget.

He said that the prime minister has also instructed a reduction in the super tax levied on large companies, and consultations have already started at the government level for its implementation.

He said the federal government is willing to gradually reduce and ultimately eliminate the super tax on large companies and businesses in the next phases.

He further stated that discussions will also be held with the International Monetary Fund (IMF) regarding the potential reduction and eventual elimination of the super tax.

He said that abolition of the super tax aims to promote investment in the country.

The FBR chairman clarified that any reduction in tax rates will directly depend on tax compliance and the increase in the number of taxpayers. The more taxpayers there are in the country, the more the tax rates can be reduced.

It should be noted that in the 2025-26 budget, the federal government had reduced the tax for the salaried class. The tax rate for those earning a salary of Rs600,001 to Rs1,200,000 had been reduced from 5 per cent to just 2.5 per cent. Taxes for different salary brackets can be checked here.