• Salaried class protests against heavy taxation in Pakistan.
• Concerns raised over tax increase and modifications to income slabs.
• Government urged to reconsider measures and provide relief.

The salaried class has launched a campaign against the heavy taxation of salaried individuals under the Finance Act 2023. Under the banner of “Save the Salaried Class,” they have initiated a country-wide campaign to raise their concerns regarding the recent implementation of additional direct taxation measures and modifications made to income slabs. These changes have had a severe impact on the financial burden faced by salaried individuals.

The campaign has addressed a letter to Finance Minister Ishaq Dar, expressing their concerns over the recent tax increase of 2.5 percent and modifications made to income slabs. They highlighted that these changes have significantly affected the financial burden on salaried individuals, especially considering the already high tax rates and the withdrawal of tax credits under the Finance Act 2023.

The salaried class is already facing various challenges such as high inflation, increased GST, elevated petroleum levies, rising energy costs, and limited employment opportunities. The proposed tax rate hike and alteration of income slabs will further reduce their net disposable income, placing additional strain on those already struggling to make ends meet.

In addition, the devaluation of the Pakistani rupee against major currencies has resulted in a significant decrease in the purchasing power of the salaried class, making it increasingly difficult for them to cover daily expenses and manage their households.

Furthermore, the salaried class pointed out the disparity in income increases between private sector employees and government employees/select sectors, which exacerbates the income gap within society.

Unlike businesses in various sectors, salaried individuals are not allowed to claim expenses against their income, further limiting their ability to effectively manage their finances.

The tax burden on the salaried class has significantly increased within a short period, as tax shields on investments were withdrawn in the previous budget and major claimable expenses were eliminated. As a result, the effective tax rate on the salaried class is the highest among all income sources.

The salaried class has urged the government to explore alternative avenues for generating tax revenue, such as focusing on sectors like wholesale and retail trade, which contribute significantly to the GDP but contribute disproportionately low tax revenue. They emphasized the importance of implementing fair taxation measures across all sectors to ensure a more equitable distribution of the tax burden.

Given their concerns, the salaried employees have requested the finance minister to reconsider the proposed taxation measures and restore deductible allowances in the computation of taxable income. This, they believe, would help alleviate the financial burdens faced by the salaried class and promote a more equitable tax system.

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