The government has indicated that tax relief for the salaried class and individuals may be considered in the upcoming federal budget for FY2026-27. Minister of State for Finance Bilal Azhar Kayani acknowledged that salaried individuals are overburdened and stated that the government wants to reduce their tax burden in the coming budget.
This is a significant development because the salaried class has remained one of the most documented and heavily taxed segments of the economy. Unlike many informal sectors, salary income is taxed at source through payroll withholding, leaving very little room for non-compliance. Any meaningful relief in tax slabs or rates would directly improve take-home income for employees.
However, the relief will have to be balanced against Pakistan’s IMF commitments and the overall revenue target. Therefore, taxpayers should wait for the Finance Bill 2026 to see whether the relief comes through revised slabs, reduced rates, higher thresholds, or targeted adjustments for middle-income salary earners.