BUDGET 2022-23 Tax relief to salaried class 'sacrificed at IMF altar'.

ISLAMABAD -- The government has decided, in principle, to reverse the drastic tax relief provided to the salaried class in its proposed federal budget for 2022-23, official sources told Dawn.

In the recently presented budget, the government had unexpectedly given major relief in terms of tax rates to individuals with higher salaries by reducing the maximum tax rate from 35pc to 32.5pc. The proposed budget also reduced the number of slabs from 12 to seven.

According to the official, the revised tax slabs and other proposals have been submitted to the International Monetary Fund (IMF). 'Technical level talks will start in the next few days,' the official said, adding that they would 'try to protect the salaried class falling in lower slabs'.

The Fund's representative in Islamabad also confirmed that they were in 'discussions with the authorities... to obtain more clarity on certain revenue and spending items'.

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Responding to written questions shared by Dawn, IMF Resident Representative Esther Perez Ruiz said 'We note the submission of the draft budget to the National Assembly last Friday.' However, she maintained that according to preliminary IMF estimates, additional measures will be needed to strengthen the budget and bring it in line with key programme objectives.

'Fund staff stand ready to continue to support the authorities' efforts in this respect and, more generally, in the implementation of policies to promote macroeconomic stability,' she said.

Senate body reviews budget proposals

Separately, a meeting of the Senate Standing Committee on Finance, held under the chairmanship of Senator Saleem Mandviwala, reviewed the budgetary tax measures in the year 2022-23.

FBR officials told the committee that restaurant services and supply of goods were taxed separately. The former was a provincial subject, while there was a issue on supply of goods between centre and provinces, but the matter has now been settled, said chairman FBR Asim Ahmed.

The meeting approved a proposal to further increase federal excise duty on cigarettes as well as international business class air tickets as well as taxes on telecom services.

Senator Farooq Naik raised questions over the imposition of a 4pc sales tax on import of jewellery. He pointed out that this was a provincial...