MNCs want doubling of taxable limit to Rs1.2m

Multinationals operating in Pakistan have asked the government to increase the minimum taxable limit from Rs600,000 a year to Rs1.2 million to offset the impact of unprecedented inflation on individuals. The representative body of 200-plus multinational investors from 14 sectors called the existing salary tax structure “inconsistent with the basic principle of non-discrimination” as part of its taxation proposals for the 2023-24 budget. While the current regime imposes on an individual earning as low as Rs600,000 a year (or Rs50,000 a month) an income tax at 2.5pc, the top marginal personal income tax rate (35pc) significantly exceeds the corporate income tax rate of 29pc – a practice that’s against the International Monetary Fund’s recommendations for good tax policy.