EPBD suggests up to 15% tax relief for salaried, corporate sectors in budget
Salaried tax rate proposed to drop from 35% to 20% in federal budget: Corporate tax suggested to be reduced from 29% to 25%: Sales tax reduction and broader tax base expansion recommended: Real estate and investment sectors proposed for major tax relief
A leading economic think tank, Economic Policy and Business Development (EPBD), has proposed sweeping tax reforms ahead of Pakistan’s federal budget for the financial year 2026–27, recommending significant reductions across multiple sectors.
In its budget proposals submitted to the federal government, the think tank suggested reducing the tax rate on salaried individuals from 35 percent to 20 percent, while also proposing a cut in corporate tax from 29 percent to 25 percent, 24NewsHD TV channel reported on Sunday.
The body further recommended lowering the tax rate on non-salaried income earners from 45 percent to 25 percent. It also proposed that individuals earning up to 80,000 rupees per month should be exempted from income tax altogether.
In addition, the think tank suggested a gradual reduction in sales tax from 18 percent to 15 percent over the next three years, alongside measures to broaden the tax base by bringing retailers, merchants and vendors into the formal taxation system.
For the real estate sector, it recommended reducing taxes from 5.5 percent to 0.5 percent. It also proposed that investors committing 100 percent capital investment in industries should not be required to disclose sources of income.
The proposals further include incentives for remittances and investment inflows into the country.
The federal government is scheduled to present the budget 2026–27 in the National Assembly on 5 June.
Reporter: Waqas Azeem