In order to fulfill the requirements set forth by the International Monetary Fund (IMF) and obtain extra bailout funding, the National Assembly has passed a revised version of Finance Bill 2023. The country’s initial budget was unsatisfactory in the eyes of the IMF, which claimed that a chance to expand the revenue base in a more equitable manner was lost.
After Ishaq Dar, the finance minister, proposed new levies and spending reductions, the revised budget was approved. The financial bill proposes additional ways to raise money, including new taxes that are projected to bring in Rs215 billion.
In plain terms, these are the income tax slabs for 2023:
- If the taxable income is less than Rs. 600,000, no tax is due.
- If the taxable income is between Rs. 600,000 and Rs. 1,200,000, the amount over Rs. 600,000 will be taxed at a rate of 2.5%.
- The tax rate does not change for salaried people with taxable income between Rs. 1,200,000 and Rs. 2,400,000. Taxes will be charged at a rate of Rs. 15,000 plus 12.5% of any amount beyond Rs. 1,200,000.
- The tax rate is Rs. 165,000 + 22.5% of the amount over Rs. 2,400,000 if the taxable income is between Rs. 2,400,000 and Rs. 3,600,000.
- The tax rate is Rs. 435, plus 27.5% of the amount over Rs. 3,600,000, for taxable income between Rs. 3,600,000 and Rs. 6,000,000.
- The tax rate is Rs. 1,095,000 plus 35% of the amount over Rs. 6,000,000 if the taxable income exceeds Rs. 6,000,000.
These changes have been made to fulfill the IMF’s requirements and generate additional funds for the country’s financial stability.