ISLAMABAD: The Federal Board of Revenue (FBR) made a significant decision on Thursday by rejecting the proposal to end income tax exemption for individuals earning up to Rs50,000 per month. This decision brings welcome relief to low-income employees and entrepreneurs.
Reports confirm that the earlier speculation about imposing income tax on those earning up to Rs0.6 million per annum has been put to rest. The FBR has categorically dismissed the rumors of removing the tax exemption for individuals in this lower income bracket as unfounded.
In an official statement, the FBR clarified its stance, stating, “There is no policy or proposal under consideration to withdraw tax exemption from those earning Rs50,000 per month, and the World Bank has not made any such demand.”
Additionally, the FBR addressed the matter of imposing agricultural tax. They emphasized that the imposition of tax on agricultural income falls under the jurisdiction of the provinces. However, it is regrettable that the provinces have struggled to collect the rightful taxes on agricultural income.
Regarding tax returns, it was reported that the number of tax filers has increased to two million, although this number remains considerably below the set target.
The FBR highlighted some key statistics: 65% of the country’s population is below 30 years of age, with 50% of them being women. Furthermore, 30% to 40% of the population is engaged in agriculture, and the tax-to-GDP ratio stands at a mere 10%.
Authorities have emphasized that closing the tax gap will require an additional 1.5 million individuals to contribute to the tax system.
