ISLAMABAD: In the latest announced ‘tax-filled’ budget 2024-25, the federal government has doubled the income tax of the citizens earning an annual income of Rs 1.2 million in Pakistan, ARY News reported on Saturday.
As the government failed to control the deficit in the last financial year, an additional tax was imposed by the government to recover the additional deficit of Rs Rs 900 billion as the budget deficit target was Rs 6,900 billion. Still, it reached Rs 7,800 billion, making the deficit 7.4 percent instead of 6.5 percent.
However, the report highlighted that the income tax rate for citizens earning an annual income of Rs 1.2 million is 2.5% tax which was earlier 1.2%.
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For those with an annual income of Rs 2.2 million, the tax rate has risen from 6.3% to 8.1%, while a yearly income of Rs 3.2 million will now be taxed at 13.4%, up from 10.7%.
Further adjustments include an increase from 18.2% to 22.7% for the annual income slab of Rs 4.2 million, and from 22.4% to 25.8% for the Rs 6.2 million income bracket.
The tax rate for an annual income of Rs 12 million has been raised from 26.3% to 31.6%, while those earning Rs 15 million annually will see their tax rate go up from 28.3% to 33.11%.
These changes reflect the government’s efforts to address the fiscal deficit and generate additional revenue from income tax to stabilize the economy.
