In a major relief for the salaried class, the Government of Pakistan has slashed the income tax rate to 1% for individuals earning up to Rs1.2 million annually. Announced in the 2024–25 federal budget, this tax reform aims to increase disposable income, reduce economic burden, and enhance compliance among middle and upper-middle-income earners.

The change is part of broader tax policy revisions, including adjustments for higher income brackets and reductions in import duties for green energy products. These reforms are designed to promote economic stability, ease inflation pressure, and incentivize formal tax declarations.

This strategic reduction in income tax reflects the government’s commitment to equitable financial policies and support for professionals, freelancers, and private sector employees in Pakistan.