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Govt Proposes Imposing Tax On Medical Expenses Of Salaried Class

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The government has quietly suggested imposition of Rs10 billion taxes on salaried class by slapping income tax on their expenditures on medical treatment, different allowances and their savings in provident and pension funds.

According to a report by Express Tribune, at least six clauses have been removed from the second schedule of the Income Tax Ordinance through the Finance Bill 2021 to pave the way for the aforementioned proposal. The Finance Bill was presented before the Parliament on Friday. In order to acquire Rs7 billion additional revenue from the salaried persons, the government has imposed 10 per cent tax on provident fund contributions over Rs500,000.

The report however quoted Finance Minister Shaukat Tarin as saying that he has asked the Federal Board of Revenue (FBR) to review the budget proposals pertaining to the salaried class.

Before the budget, the government representatives had vowed to protect the interest of salaried persons and said that the International Monetary Fund (PMF)’s condition to change the slab rates for the salaries class will be resisted. But it appears that the finance minister did not keep his word as the salaries class now faces taxes on its allowances and savings.

During his address to the launch ceremony of the Economic Survey, Tarin had revealed that the IMF asked the government to impose Rs150 billion taxes on the salaried class.

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