Senate Recommends 0% Tax on Yearly Salaries Up to Rs. 1.2 Million

The Senate Standing Committee on Finance on Wednesday recommended zero income tax on annual incomes up to Rs. 1.2 million. Senator Shibli Faraz insisted there should be no tax on annual salaries between Rs. 600,000 and Rs. 1.2 million. He pointed out that a person earning Rs. 100,000 a month effectively takes home only Rs. 42,000 after deductions. The committee also discussed imposing taxes on the income of elite clubs. Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial said income generated by such clubs would be taxed but these institutions do not benefit the general public and serve only around 300 privileged individuals. Surprisingly, Committee Chairman Senator Saleem Mandviwala opposed the tax. Minister of State for Finance Bilal Azhar Kayani defended the proposed tax, saying it would only apply if club income exceeds expenditures and that the issue concerns the country’s privileged class. Most committee members supported the taxation of club income.