The federal government is preparing a major relief package worth nearly Rs975 billion for the corporate sector and salaried class, with Prime Minister Shehbaz Sharif directing officials to begin discussions with the International Monetary Fund (IMF) on possible tax reductions.

According to sources, all proposals will be subject to IMF approval.

The sources said the government is considering substantial tax relief for both sectors under the planned Rs975bn package.

For salaried individuals, an initial proposal of up to a 25% reduction in income tax burden is under review.

Rs190bn relief for corporate sector

The corporate sector could receive relief of around Rs190bn through the abolition of super tax, while proposals to scrap income tax surcharges and the capital value tax on foreign assets are also being examined.

In addition, authorities are considering eliminating super tax, minimum income tax, and corporate dividend tax for corporations — a move expected to have an immediate fiscal impact exceeding Rs600bn.

Infrastructure cess

The sources said that ending the Sindh and Punjab infrastructure cess is also part of the proposed plan.

Other suggestions include abolishing the 1% advance income tax on exporters and removing the advance tax on overseas credit card payments.

The prime minister has also instructed officials to end the Workers Welfare Fund and Workers Participation Tax.

IMF holds the key

According to Finance Ministry officials, the entire package and all associated measures will depend on IMF approval, and the government will seek the lender’s endorsement before implementation.