Government Acknowledges Tax Burden on Salaried Class, Pledges Relief When Economy Improves
The government has acknowledged the financial strain on the salaried class due to taxation and reaffirmed its commitment to reducing their burden once economic conditions improve.
National Assembly Discussion on Salaried Class Taxation
The issue was raised in the National Assembly through a Calling Attention Notice by Sharmila Faruqui Hashaam and Asiya Naz Tanoli, drawing the Minister for Finance and Revenue’s attention to the excessive tax burden on salaried individuals. The lawmakers stressed that the current tax structure is causing severe financial hardships and raising concerns among the public.
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Government’s Economic Stability Plan
Minister of State for Railways Bilal Azhar Kayani responded, stating that the government is focused on fiscal and macroeconomic stability while implementing the IMF program.
Key economic improvements highlighted:
- FBR tax collection increased by 26% in the current fiscal year, reaching Rs. 7,345 billion by February, compared to Rs. 5,891 billion last year.
- Primary surplus (government’s revenue minus expenditures, excluding interest payments) nearly doubled from Rs. 1,938 billion last year to Rs. 3,518 billion this year.
Kayani emphasized that broadening the tax net will ensure a fairer distribution of tax burdens and lessen pressure on the salaried class.
Tax Burden on Salaried Class: Government’s Commitment
Kayani provided salaried taxpayers’ statistics:
- 4.2 million salaried taxpayers in total.
- 3.2 million earn Rs. 1.2 million/year (Rs. 100,000/month) or less.
- Majority earn around Rs. 600,000/year (Rs. 50,000/month) and are tax-exempt.
- Those earning Rs. 1.2 million annually pay Rs. 28,000 in tax.
Despite these figures, he acknowledged the need to further ease the tax burden and reiterated the Prime Minister’s commitment to reducing taxation for salaried individuals once economic conditions improve.
Retail Tax Compliance & Inflation Control
The government has successfully increased tax compliance among retailers:
- Filing retailers tripled from 200,000 to 600,000 this year.
- Tax collection from retailers surged from Rs. 190 billion to Rs. 425 billion.
On inflation control, Kayani stated:
- Inflation has dropped to a historic low of 1.5%.
- The government is focusing on increasing incomes and reducing essential commodity prices.
- Further improvement in purchasing power is expected in the coming year.
Future Outlook
“In the past year, we have seen significant improvements, and in the coming year, people will witness further increases in disposable income and purchasing power,” Kayani assured.
