Islamabad (MNN); The federal government is working on a major relief package worth nearly Rs975 billion for the corporate sector and salaried class, with Prime Minister Shehbaz Sharif instructing authorities to begin talks with the International Monetary Fund (IMF) on proposed tax cuts.
According to sources, all recommendations will ultimately require IMF approval.
Officials indicated that the government is considering significant tax reductions for both sectors under the proposed Rs975bn package. For salaried earners, an initial plan includes reducing the income tax burden by up to 25%.
Rs190bn relief for businesses
The corporate sector could receive around Rs190bn in relief through the elimination of super tax, while the removal of income tax surcharges and capital value tax on foreign assets is also under study.
Authorities are additionally reviewing proposals to abolish the super tax, minimum income tax, and corporate dividend tax — steps expected to have a fiscal impact of more than Rs600bn.
Infrastructure cess removal
Sources said that ending the Sindh and Punjab infrastructure cess is also being examined. Other suggestions include abolishing the 1% advance income tax on exporters and removing the advance tax on overseas credit card transactions.
The prime minister has further instructed officials to discontinue the Workers Welfare Fund and the Workers Participation Tax.
IMF approval required
Finance Ministry officials stressed that the entire relief package and all related measures hinge on IMF approval, and the government will formally seek the Fund’s endorsement before moving forward.
