The International Monetary Fund (IMF) has proposed a new tax system for Pakistan that would see salaried workers paying more in taxes.
The IMF wants to create a single tax system for salaried class and business owners by lowering the income amount at which salaried workers pay the highest 35% tax rate. This would mean that salaried workers earning between Rs51,000 and Rs100,000 per month would see their taxes increase.
The IMF also wants to reduce the number of tax brackets to a maximum of four. This could mean that some people in high tax brackets would end up paying more in taxes than they actually take home.
The IMF’s proposed reforms aim to recover Rs650 billion more from people with salaries or business income. This plan would place a heavy burden on these individuals, who already have a fixed income.
Finance Minister Muhammad Aurangzeb announced that IMF representatives will be in Pakistan within 7 to 10 days to discuss a new long-term program.
