The federal government has agreed to exempt income tax on annual salaries up to Rs1.2 million, following demands made by the Pakistan Peoples Party (PPP), Chairperson Bilawal Bhutto Zardari confirmed on Thursday.
Addressing the National Assembly, Bilawal said the PPP had agreed to support the federal budget after its key proposals were accepted, including the income tax relief for individuals earning Rs100,000 per month and a reduction in sales tax on solar panels.
He further noted that the government had revised its position on controversial arrest powers proposed for the Federal Board of Revenue (FBR). Under the revised plan, arrest powers will only apply to cases of sales tax fraud and will not be exercised at the inquiry stage.
“Moreover, tax fraud will now be classified as a bailable offence,” Bilawal added, expressing satisfaction over the agreed safeguards.
Earlier this week, the PPP had withheld its support for the Finance Bill due to concerns about what it called “draconian powers” being granted to tax officials. However, Deputy Prime Minister Ishaq Dar reportedly played a central role in resolving the standoff by introducing new legal safeguards in the final version of the Finance Act.
Bilawal also stated that the PPP originally called for exempting income up to Rs1 million from tax, but welcomed the government’s decision to raise the threshold to Rs1.2 million.
In another major concession, the government agreed to increase the budget for the Benazir Income Support Programme (BISP) by 20%, bringing the total allocation for the next fiscal year to Rs716 billion.
