The National Assembly has passed an amended Finance Bill 2023, marking a significant milestone in the country’s ongoing financial saga. With the revised bill meeting the rigorous conditions set forth by the International Monetary Fund (IMF), hopes are high that this last-ditch effort will unlock a vital infusion of bailout funds.

The IMF had previously voiced its disappointment with the country’s initial budget, deeming it a missed opportunity to implement a more progressive and comprehensive tax framework.

However, determined to rectify this setback, Finance Minister Ishaq Dar introduced a series of new taxes and expenditure cuts, which were instrumental in garnering the Assembly’s approval.


Undoubtedly, the standout feature of this momentous bill is the introduction of fresh taxation measures projected to generate an impressive Rs215 billion in revenue.

In a bold move towards fairness and equity, the Finance Bill also sanctions an increase in tax rates for higher income brackets within both the salaried and non-salaried classes.

Outlined below are the revised income tax slabs for the year 2023, reflecting a more balanced approach to income taxation:

Taxable income rangeTax rate
Not exceeding Rs600,0000% (Tax-free)
Rs600,001 – Rs1,200,0002.5% of the amount exceeding Rs600,000
Rs1,200,001 – Rs2,400,000Rs15,000 + 12.5% of the amount exceeding Rs1,200,000
Rs2,400,001 – Rs3,600,000Rs165,000 + 22.5% of the amount exceeding Rs2,400,000
Rs3,600,001 – Rs6,000,000Rs435,000 + 27.5% of the amount exceeding Rs3,600,000
Exceeding Rs6,000,000Rs1,095,000 + 35% of the amount exceeding Rs6,000,000

1. Tax-free threshold:

Individuals with a taxable income not exceeding Rs600,000 are exempt from income tax obligations.

2. Progressive tax rates:

For those with taxable incomes exceeding Rs600,000 but not surpassing Rs1,200,000, a tax rate of 2.5 per cent will be levied on the amount exceeding Rs600,000.

3. Unchanged tax rate for salaried individuals:

Salaried individuals with taxable incomes ranging from above Rs1,200,000 to Rs2,400,000 will continue to face a tax rate of Rs15,000 plus 12.5 per cent of the amount exceeding Rs1,200,000.

4. Moderate income brackets:

Taxpayers with taxable incomes exceeding Rs2,400,000 but not surpassing Rs3,600,000 will experience a tax rate of Rs165,000 plus 22.5 per cent of the amount exceeding Rs2,400,000.

5. Higher income brackets:

Individuals falling within the income range of Rs3,600,000 to Rs6,000,000 will face a tax rate of Rs435,000 plus 27.5 per cent of the amount exceeding Rs3,600,000.

6. Top earners:

Those with taxable incomes exceeding Rs6,000,000 will be subject to a tax rate of Rs1,095,000 plus 35 per cent of the amount exceeding Rs6,000,000.

With this bold and progressive tax structure, the Finance Bill 2023 promises to forge a more equitable financial landscape.

As the nation eagerly awaits the release of the much-needed bailout funds, this resolute step taken by the National Assembly stands as a testament to the government’s determination to safeguard the country’s economic well-being and chart a path towards sustainable growth.