Here is the recreated news article using the inverted pyramid structure and covering the 5Ws and 1H, while adhering to professional journalism ethics and the PECA Act:
Govt Slashes Income Tax Rates for Salaried Class in FY26 Budget to Ease Financial Burden
ISLAMABAD – In a major move to support middle- and high-income earners, the federal government has proposed substantial income tax relief for the salaried class under the Budget 2025–26, Finance Minister Muhammad Aurangzeb announced Tuesday in the National Assembly.
Who will benefit? What was announced? When was this announced? Where will the changes apply? Why is this being implemented? How does this fit into the wider budget?
Taxpayers earning up to Rs2.2 million annually are the biggest beneficiaries, as the minimum tax rate has been reduced from 15% to 11%. Individuals earning between Rs600,000 and Rs1.2 million will see their rate fall from 5% to 2.5%, while those earning between Rs2.2 million and Rs3.2 million will have their rate cut from 25% to 23%. Aurangzeb said the government had made it a priority to support salaried individuals, who historically bear a heavy tax load. In line with this, the budget proposes across-the-board tax rate cuts, alongside a 1% surcharge reduction for high earners (over Rs1 million annually) to slow down brain drain. The tax reforms were unveiled on Tuesday, June 11, 2025, during the presentation of the federal budget for the fiscal year 2025–26.These tax measures will apply nationwide across Pakistan, with the intention to retain top local talent and simplify the tax system.The relief aims to adjust salaries in line with inflation, simplify tax brackets, and encourage skilled professionals to stay in Pakistan rather than migrate due to excessive taxation.
The Rs17.57 trillion budget also includes a 20% hike in defence spending, now set at Rs2.55 trillion, in response to recent national security concerns. The government targets a 4.2% GDP growth rate for FY26, compared to 2.7% this year. While the economy is projected to expand due to lower interest rates, analysts note that fiscal pressures and IMF conditions continue to challenge long-term investment growth.
