Govt announces tax relief for salaried class, businesses, exporters

Finance Minister Muhammad Aurangzeb on Friday announced a range of tax relief measures for salaried class, businesses, exporters, the construction sector, the IT industry and women’s health products in the federal budget for 2026-27.

Presenting the budget in the National Assembly, the minister said the government was aware of the financial pressures faced by salaried individuals and had proposed tax relief for taxpayers in four income brackets.

Under the proposed measures, the tax rate for salaried individuals earning between Rs2.2 million and Rs3.2 million annually has been reduced from 23 per cent to 20 per cent.

For those earning between Rs3.2 million and Rs4.1 million a year, the tax rate has been proposed at 25 per cent, down from 30 per cent.

The government has also proposed reducing the tax rate from 35 per cent to 29 per cent for salaried taxpayers with annual incomes ranging from Rs4.1 million to Rs5.6 million.

Similarly, individuals earning between Rs5.6 million and Rs7 million annually would see their tax rate reduced from 35 per cent to 32 per cent.

In addition to these reductions, the finance minister announced the abolition of the surcharge on the salaried class, describing it as a longstanding demand of employees.

The government has also proposed relief for businesses through changes in the super tax regime. Aurangzeb said the one per cent super tax on incomes between Rs150 million and Rs500 million would be completely abolished.

For companies and individuals with incomes exceeding Rs500 million, the super tax rate has been proposed to be reduced from 10 per cent to 8 per cent.

The minister said the federal cabinet, on the direction of Prime Minister Shehbaz Sharif, also decided to abolish the super tax on exporters.

However, he clarified that the surcharge imposed on banks, oil and gas companies, and fertiliser firms would remain unchanged.

Highlighting the role of the construction sector in the economy, Aurangzeb said promoting construction activity was one of the most effective ways to generate employment and stimulate industrial growth.