Latest news with #WaheedShahzadButt
Business Recorder
11-06-2025
- Business
- Business Recorder
Pakistan govt offers tax relief, cuts rates for salaried class
ISLAMABAD: The government has announced substantial tax relief measure in the federal budget (2025-26) for salaried class taxpayers, and reduced tax rates across all income slabs for salaried individuals, aiming to provide much-needed financial respite amid economic challenges. Tax rates for salaried individuals for income slab upto Rs.3,200,000 has been reduced to provide relief to lower and middle tiers income bracket. Similarly, surcharge rate is proposed to be reduced from 10% to 9% for salaried individuals only. The Finance Bill (2025-26) introduced a revised tax structure for salaried individuals, significantly lowering tax rates and amounts across various income brackets. Federal budget 2025-26: Cut in taxation rates for salaried people likely Income between Rs600,000 and Rs1.2 million: The tax rate has been set at 1%, with the tax liability on an income of Rs1.2 million reduced from Rs30,000 to Rs6,000. Income between Rs1.2 million and Rs2.2 million: The 15% tax rate imposed on annual income between Rs1.2 million and Rs2.2 million has been reduced by 4%. The new tax is set at 11%. This means, an employee earning up to Rs 2.2 million, who used to pay a maximum of Rs330,000 annually in tax, will now pay Rs242,000. Income between Rs2.2 million and Rs3.2 million: The tax rate has been lowered from 25% to 23%, providing relief to higher-earning salaried individuals. An employee earning up to Rs2.2 million, whose maximum tax was previously Rs550,000 per year, will now have Rs506,000 deducted annually. These reductions across all tax slabs reflect the government's commitment to supporting the salaried class, which has faced significant economic pressures due to inflation and rising living costs. When contacted, tax lawyer Waheed Shahzad Butt informed that salaried individuals, earning between Rs600,000 and Rs1.2 million annually, will get the largest relief as the Pakistan government proposed a one percent tax rate from the earlier five percent. The proposal means that individuals earning Rs1.2 million will pay Rs6,000 in taxes, down from Rs30,000. Additionally, the Pakistan government has proposed 11 percent income tax on taxpayers earning up to Rs2.2 million annually, a sharp four percent decline from the earlier 15 percent. Copyright Business Recorder, 2025
Business Recorder
11-06-2025
- Business
- Business Recorder
Teachers, researchers: 25pc tax rebate restored
ISLAMABAD: In a significant move providing much-needed relief to the academic community, the federal government has announced the restoration of a 25 percent tax rebate against tax payable by full-time teachers and researchers under the Finance Bill 2025-26. This crucial relief will be applied retrospectively, covering tax years, 2023, 2024, and 2025. Speaking to this correspondent, tax lawyer Waheed Shahzad Butt lauded the government's decision, attributing significant credit to the Office of the Federal Tax Ombudsman (FTO) for their unwavering efforts. 'This is a monumental achievement for full-time teachers and researchers, particularly those falling under the salaried class who often find themselves without substantial influence,' stated Butt. 'The credit for this commendable move undoubtedly goes to the diligent and untiring efforts made by the Registrar of the FTO, Khalid Javed, on this critical issue.' The restoration of this tax rebate comes as a significant reprieve for educators and researchers who had faced a discontinuation of this benefit, leading to considerable financial burden and widespread concerns within the academic community. The FTO's consistent advocacy and persistence in highlighting the plight of these un-influential taxpayers are widely recognised as instrumental in bringing about this positive change. Butt emphasised that this decision not only provides tangible financial relief but also underscores the government's commitment to supporting the education and research sectors, which are vital for national development. The retrospective application of the rebate further solidifies its impact, addressing past grievances and ensuring a more equitable tax treatment for this dedicated segment of the workforce. The move is expected to be met with widespread appreciation from teachers, researchers, and educational institutions across the country, fostering a more conducive environment for academic pursuits and intellectual growth. The federal government budget document states,'25% rebate against tax payable by full time teachers and researchers will be restored retrospectively, ie, from TY 2023 to TY 2025.' Copyright Business Recorder, 2025
Business Recorder
11-06-2025
- Business
- Business Recorder
Tax arrears recovery period slashed
ISLAMABAD: To immediately recover disputed tax from taxpayers, the federal government has drastically reduced time period for the recovery of tax arrears when a high court rules in favor of the tax department. Through Finance Bill 92025-26), the Federal Board of Revenue (FBR) has introduced a significant amendment to the Income Tax Ordinance, 2001. The amendment, specifically a new subsection added to Section 140 of the Ordinance, stipulates that tax payable under an assessment order will become immediately recoverable, or within the time specified in a notice issued by the income tax authority, irrespective of timelines in other provisions or court judgments. This accelerated recovery is triggered when a tax issue is decided by a High Court or the Supreme Court of Pakistan. A crucial proviso within this new subsection clarifies the immediate impact on appeals: 'Provided that where the High Court decides the appeal filed by the Commissioner in favor of the department under section 133, recovery shall be made after seven days from the date of the order of the High Court.' This means that if a Commissioner's appeal against a taxpayer is upheld by the High Court, the tax arrears will become recoverable within a mere seven days from the date of the High Court's order. FBR is expected to issue further guidelines on the implementation of this amended section, particularly concerning the issuance of recovery notices and the procedures for taxpayers to adhere to the compressed timeline. Tax professionals and businesses are advised to carefully review their litigation strategies and prepare for swifter recovery actions in light of this new legal provision. When contacted, tax lawyer Waheed Shahzad Butt stated that earlier new amendments introduced through the Tax Laws (Amendment) Ordinance, 2025 have ignited controversy across legal and tax circles, as they grant sweeping powers to tax officers to recover taxes without issuing prior notice to taxpayers. Mr. Butt warned that such unchecked powers could erode public trust in the tax system and potentially lead to abuse. This will undermine the neutrality of the taxation system and promote tax robbery moves rather than genuine tax recovery. IHC has earlier ruled that a notice under Section 138, is mandatory before initiating any coercive tax recovery action under Section 140. Copyright Business Recorder, 2025
Business Recorder
11-06-2025
- Business
- Business Recorder
Govt offers tax relief, cuts rates for salaried class
ISLAMABAD: The government has announced substantial tax relief measure in the federal budget (2025-26) for salaried class taxpayers, and reduced tax rates across all income slabs for salaried individuals, aiming to provide much-needed financial respite amid economic challenges. Tax rates for salaried individuals for income slab upto Rs.3,200,000 has been reduced to provide relief to lower and middle tiers income bracket. Similarly, surcharge rate is proposed to be reduced from 10% to 9% for salaried individuals only. The Finance Bill (2025-26) introduced a revised tax structure for salaried individuals, significantly lowering tax rates and amounts across various income brackets. Federal budget 2025-26: Cut in taxation rates for salaried people likely Income between Rs600,000 and Rs1.2 million: The tax rate has been set at 1%, with the tax liability on an income of Rs1.2 million reduced from Rs30,000 to Rs6,000. Income between Rs1.2 million and Rs2.2 million: The 15% tax rate imposed on annual income between Rs1.2 million and Rs2.2 million has been reduced by 4%. The new tax is set at 11%. This means, an employee earning up to Rs 2.2 million, who used to pay a maximum of Rs330,000 annually in tax, will now pay Rs242,000. Income between Rs2.2 million and Rs3.2 million: The tax rate has been lowered from 25% to 23%, providing relief to higher-earning salaried individuals. An employee earning up to Rs2.2 million, whose maximum tax was previously Rs550,000 per year, will now have Rs506,000 deducted annually. These reductions across all tax slabs reflect the government's commitment to supporting the salaried class, which has faced significant economic pressures due to inflation and rising living costs. When contacted, tax lawyer Waheed Shahzad Butt informed that salaried individuals, earning between Rs600,000 and Rs1.2 million annually, will get the largest relief as the Pakistan government proposed a one percent tax rate from the earlier five percent. The proposal means that individuals earning Rs1.2 million will pay Rs6,000 in taxes, down from Rs30,000. Additionally, the Pakistan government has proposed 11 percent income tax on taxpayers earning up to Rs2.2 million annually, a sharp four percent decline from the earlier 15 percent. Copyright Business Recorder, 2025
Business Recorder
11-06-2025
- Business
- Business Recorder
Exceeding Rs10m annually: Flat 5pc tax on pension income proposed
ISLAMABAD: The federal government has introduced a new tax measure targeting high-value pension incomes, as part of its Finance Bill 2025-26 proposals. Under the new framework, pension income exceeding Rs10 million annually, received by individuals below the age of 70, will be subject to a flat tax rate of five percent. The proposal clearly delineates that pension income up to Rs10 million in a tax year will remain entirely tax-free, preserving relief for the vast majority of pensioners. Pension, tax relief thresholds: FBR working on two major budget proposals However, individuals below 70 years of age with pension earnings above this threshold will now contribute to the national exchequer through a modest five per cent tax on the pension income. Tax lawyer Waheed Shahzad Butt, commenting on the proposal, said, 'This is a prudent step towards a more equitable tax system. High-earning individuals benefiting from generous pension schemes should participate in tax contributions, and this move promotes fairness and fiscal responsibility.' The measure is expected to enhance revenue collection without burdening the lower and middle-income retired population, striking a balance between equity and economic prudence. This decision marks a step forward in broadening the tax base and ensuring that wealthier segments of society share a fairer portion of the national tax burden. The Federal Budget 2025 document stated, 'Pension income received by an individual below the age of 70 years and over and above of Rs10,000,000 has been charged to tax at the flat rate of 5%. There will be 0% tax rate on pension income not exceeding Rs10,000,000.' Copyright Business Recorder, 2025
