ISLAMABAD: The government has dropped a major budget proposal to tax pensions in 2024-25. It is learnt that the Federal Board of Revenue (FBR) has prepared a budget proposal to tax pensions through Finance Bill 2024.
The proposal was to impose 10 percent tax on pensions exceeding Rs100,000 per month.
However, Prime Minister Shehbaz Sharif had directed the tax authorities to take alternative revenue measures to avoid taxation of pensioners. Sources said the International Monetary Fund (IMF) and the senior tax officials also held virtual talks on the budget proposals here on Monday.
During the virtual talks, proposals to impose a uniform tax on business and salaried class were discussed, sources said.
The tax authorities also informed the stance of the government on the taxation of pensions.
The Pakistani side has submitted different proposals to impose a uniform tax on business and salaried class.
However, no final decision has been taken in this regard.
Sources said that the Pakistani team will also brief the prime minister on virtual talks with the IMF.
On the directions of the prime minister, some big proposals have yet not been made part of the Finance Bill, 2024.
The prime minister has already turned down a few key budgetary proposals of the FBR to increase the effective income tax rate for salaried individuals, raise the standard rate of sales tax from 18 to 19 percent and impose 18 percent sales tax on petroleum products or “Carbon Tax” on POL products.
Copyright Business Recorder, 2024
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