Finance Minister Senator Muhammad Aurangzeb presented Pakistan’s budget for the 2024-25 fiscal year during a turbulent session of the National Assembly on Wednesday. The session saw the opposition raising slogans and tearing up copies of the budget as the 60-year-old minister announced the new financial measures.
One of the key highlights of the budget was the new tax target, set at Rs12.97 trillion, representing a 38% increase from the previous year. This ambitious target is part of the government’s strategy to secure an essential bailout package from the International Monetary Fund (IMF). Despite facing significant financial and political challenges over the past year, the government has made notable economic advancements, according to Aurangzeb.
Here is a table for the new income tax slabs for the fiscal year 2024-25:
| Taxable Income | Rate of Tax |
|---|---|
| Where taxable income does not exceed Rs 600,000 | 0% |
| Where taxable income exceeds Rs600,000 but does not exceed Rs1,200,000 | 5% of the amount exceeding Rs 600,000 |
| Where taxable income exceeds Rs1,200,000 but does not exceed Rs 2,200,000 | Rs30,000 + 15% of the amount exceeding Rs 1,200,000 |
| Where taxable income exceeds Rs 2,200,000 but does not exceed Rs 3,200,000 | Rs180,000 + 25% of the amount exceeding Rs 2,200,000 |
| Where taxable income exceeds Rs 3,200,000 but does not exceed Rs 4,100,000 | Rs 430,000 + 30% of the amount exceeding Rs 3,200,000 |
| Where taxable income exceeds Rs 4,100,000 | Rs 700,000 + 35% of the amount exceeding Rsb4,100,000 |
The approved finance bill introduces higher taxes for high-income earners, both salaried and non-salaried individuals. The new income tax slabs for 2024 are as follows:
- Individuals earning up to Rs600,000 will not be taxed.
- For those with an income between Rs600,000 and Rs1,200,000, a 15% tax will be applied to the amount exceeding Rs600,000.
- For incomes ranging from Rs1,200,000 to Rs1,600,000, the tax will be Rs90,000 plus 20% of the amount exceeding Rs1,200,000.
- Earnings between Rs1,600,000 and Rs3,600,000 will incur a tax of Rs170,000 plus 30% of the amount exceeding Rs1,600,000.
- For incomes between Rs3,600,000 and Rs5,600,000, the tax will be Rs650,000 plus 40% of the amount exceeding Rs3,600,000.
- For those earning over Rs5,600,000, the tax will be Rs1,610,000 plus 45% of the amount exceeding Rs5,600,000.
These measures are aimed at enhancing revenue collection to meet the new tax target and support economic stability. The government hopes that by increasing taxes on higher earners, it will be able to balance the budget and secure the IMF bailout needed for continued economic progress.
