The Finance Bill 2023 has been revealed, and it shows a higher rate of income tax applicable from July 1, 2023. The Federal Board of Revenue (FBR) presented the bill on Sunday, 25th June.
According to the Finance Bill 2023, the tax rates have been increased where the annual taxable income exceeds Rs. 2,400,000.
|#||Taxable Income (Yearly)||Tax Rate|
|1.||Rs. 600,000 or Below||0%|
|2.||Rs. 600,001 to Rs. 1,200,000||2.5% on amounts exceeding Rs. 600,000|
|3.||Rs. 1,200,001 to Rs. 2,400,000||Rs. 15,000 + (12.5% of the amount exceeding Rs. 1,200,000)|
|4.||Rs. 2,400,001 to Rs. 3,600,000||Rs. 165,000 + (22.5% of the amount exceeding Rs. 2,400,000)|
|5.||Rs. 3,600,001 to Rs. 6,000,000||Rs. 435,000 + (27.5% of the amount exceeding Rs. 3,600,000)|
|6.||Rs. 6,000,001 and higher||Rs. 1,095,000 + (35% of the amount exceeding Rs. 6,000,000)|
The tax slab has not been changed for salary brackets from Rs. 600,001 to Rs. 2,400,000, a great relief for the lower class.
As for income exceeding Rs. 2,400,000, the tax slabs have been raised.
Raising PKR 215 billion from Taxes
One of the reasons for increased tax slabs is to fulfill IMF requirements so that the loan installment can be received, which Pakistan eagerly awaits.
The government plans on collecting PKR 215 billion from taxes. Considering the current crises and lack of funds, heavy taxes are the way to raise more funds and help stabilize the falling economy.