ISLAMABAD - The Senate Standing Committee on Finance and Revenue on Tuesday has recommended the government to revise the tax slabs for the individuals including salaried class.

The committee, headed by Farooq Hamid Naik, has agreed with the government’s proposal that there would be complete exemption of income tax on the annual income up to Rs1.2 million. However, the government would take nominal tax of Rs1000 for income between Rs400,000 to Rs800,000 and at of Rs2000 for income between Rs800,000 to Rs1,200,000 to make them taxpayers. Otherwise, due to enhancement of the taxable limit of income to Rs1.2 million, the number of filers will be substantially reduced.

However, the parliamentary committee has recommended the government to revise upward the tax rates on other slabs except Rs1.2 million per year. 

The committee has proposed that there should be 10 percent income tax on income falling between Rs1.2 to Rs2.4 million annually instead of 5 percent recommended by the government. Similarly, the income tax rate should be revised to 15 percent as compared to 10 percent on income between Rs2.4 to Rs4.8 million annual.

Maximum percentage of 25 percent should be imposed on the income above Rs4.8 million per annum as compared to 15 percent proposed by the government. Most of the senators were not happy with the massive reduction in the tax slab for affluent individuals with higher incomes, which was proposed to be brought down to 15pc from 35pc.

The Senate Standing Committee on Finance and Revenue has finalised the budget recommendations of the Senators, which would be sent to National Assembly for incorporation in Finance Bill 2018.

However, it is not binding for the government to implement on the recommendations of the Senate.

The committee has also proposed to reduce the Federal Excise Duty (FED) on the air tickets.

It has also recommended imposing uniform duties on hybrid and electric cars. The committee has also taken recommendations from the Federation of Pakistan Chamber of Commerce and Industry, All Pakistan Textile Mills Association other associations.