Pakistan Announces New Income Tax Brackets and Rates

Effective from 1 July 2023, the government of Pakistan has announced new Income tax brackets and rates, as summarized below, along with the previous tax year rates:

Annual Taxable Income (in PKR)	Income Tax Tax Year Ending on 30-06-2023	Income Tax Tax Year Ending on 30-06-2024
Up to 600,000	Nil	Nil
600,001 – 1,200,000	2.5% of excess over 600,000	2.5% of excess over 600,000
1,200,001 – 2,400,001	15,000 + 12.5% of excess over 1,200,000	15,000 + 12.5% of excess over 1,200,000
2,400,001 – 3,600,000	165,000 + 20% of excess over 2,400,000	165,000 + 22.5% of excess over 2,400,000
3,600,001 – 6,000,000	405,000 + 25% of excess over 3,600,000	435,000 + 27.5% of excess over 3,600,000
6,000,001 – 12,000,000	1,005,000 + 32.5% of excess over 6,000,000	-
Over 6,00,001	-	1,095,000 + 35% of excess over 6,000,000
Over 12,000,001	2,955,000 + 35% of excess over 12,00,000	-

The amended rates will apply to all wages and salaries earned after 1 July 2023.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.

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Pakistan – New Income Tax Brackets and Rates

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