Pakistan and IMF disagree over new income tax rates that will burden salaried class
Talks between Pakistan and the IMF have ended inconclusively due to a disagreement over new income tax rates for salaried and non-salaried persons and the imposition of a standard 18 per cent sales tax on agriculture and health sector goods, according to a media report on Sunday.
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On Friday, Pakistan and the International Monetary Fund (IMF) authorities discussed the outstanding issues related to taxation and the energy sector.
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Citing sources, the Express Tribune newspaper reported that both sides could not resolve their differences on the income tax threshold, the merger of salaried and non-salaried rates and the maximum income tax rate for individuals.
Discussions are revolving around whether to charge a new backbreaking 45 per cent income tax from salaried and non-salaried individuals on a monthly income of just over Pakistani Rs 4,67,000, sources said.
At present, the maximum rate of 35 per cent applies to a monthly income of over Pakistani Rs 5,00,000.
However, both sides have converged on the issue of increasing the income tax burden on exporters in the next budget who paid a paltry sum of Pakistani Rs 86 billion this year, which is 280 per cent less than the taxes paid by the salaried people.
Pakistan also showed a willingness to tax pensions beyond a certain income threshold.
In the latest talks, the international money lender insisted on merging the slabs related to salaried, non-salaried
