By Staff Reporter
ISLAMABAD: Pakistan’s salaried class has launched a country-wide campaign against the government’s decision to raise income tax rates by 2.5 percentage points and change tax slabs for individuals in the latest budget, saying it would hurt their already strained finances.
The campaign, called “Save the Salaried Class”, has sent a letter to Finance Minister Ishaq Dar, urging him to reconsider the tax measures and provide relief to the salaried class by restoring deductible allowances and tax credits.
“We are writing to address the recent imposition of further direct taxation measures on the salaried class, specifically the 2.5 percent increase in taxes coupled with changes to income slabs. These changes have severely impacted the financial burden on salaried individuals,” the letter said.
The coalition government of Prime Minister Shehbaz Sharif and his finance minister Dar faced public anger after passing a revised budget that mostly raised taxes to secure a bailout from the International Monetary Fund (IMF).
The budget aims to raise an extra Rs215 billion in the fiscal year starting July 1.
The measures include higher income tax and a 10-rupee increase in the petroleum development levy, which will hit consumers already struggling with inflation. Critics said the budget would hurt the middle class and the poor while sparing the elite and the military.
Social media users slammed Sharif and Dar for being out of touch with the people’s woes.
The letter said the salaried class was already facing high inflation, increased sales tax, elevated petroleum levies, escalating energy costs, and limited employment opportunities.
“The proposed tax rate hike and alteration of income slabs will significantly reduce their net disposable income, further straining those who are already struggling to make ends meet,” it said.
The letter also said the salaried class had seen its purchasing power decline by over 50 percent due to the devaluation of the Pakistani rupee against major currencies and had not received salary increases in line with inflation.
“Unlike businesses in corporate, industry, trade, and service sectors, salaried individuals are not allowed to claim their expenses against their income, further limiting their ability to manage their finances effectively,” it said.
The letter urged the government to explore alternative avenues for generating tax revenue, such as focusing on the wholesale and retail trade sector, which contributes 18 percent to the GDP but pays only one percent in taxes.
“Implementing fair taxation measures across all sectors would ensure a more equitable distribution of the tax burden,” it said.
The letter said the salaried class comprised law-abiding citizens who did not engage in illegal income generation but were being penalized for their honesty and integrity.
“We request the finance minister to reconsider the proposed taxation measures and provide much-needed relief to the salaried class by restoring deductible allowances in the computation of their taxable income. This would help alleviate their financial burdens and promote economic growth,” it said.
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