Salaried Workers Begin Nationwide Protests Against Heavy Taxation in Budget 2023

The salaried class in Pakistan has launched a country-wide campaign called “Save the Salaried Class” to protest against heavy taxation imposed on them under the Finance Act 2023. In a letter addressed to Finance Minister Ishaq Dar, the representatives of the campaign express concerns about the recent increase in direct taxation on salaried individuals and modifications made to income slabs.

The letter highlights that these changes have significantly burdened salaried individuals who are already grappling with high inflation, increased GST, elevated petroleum levies, escalating energy costs, and limited employment opportunities. The proposed tax rate hike and alteration of income slabs will further reduce their net disposable income, putting additional strain on those who are already struggling to make ends meet.

The letter also points out that the substantial devaluation of the Pakistani rupee against major currencies has led to a significant decrease in the purchasing power of the salaried class. It emphasizes that private sector employees, who constitute the majority of the workforce, have not received salary increases in line with escalating inflation rates, further exacerbating income disparities.

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Unlike businesses in other sectors, salaried individuals are not allowed to claim their expenses against their income, limiting their ability to effectively manage their finances. The government’s withdrawal of tax shields on investments and elimination of major claimable expenses for the salaried class in previous budgets have already increased their financial burdens.

The salaried class urges the government to explore alternative avenues for generating tax revenue, such as focusing on sectors like wholesale and retail trade that contribute significantly to the GDP but have a disproportionately low tax contribution. They emphasize the need for fair taxation measures across all sectors to ensure an equitable distribution of the tax burden.

The letter emphasizes that the salaried class comprises law-abiding citizens who do not engage in illegal income generation. However, the persistently high inflation has worsened their financial challenges, making it increasingly difficult for them to meet their basic needs.

In light of these concerns, the campaign requests the finance minister to reconsider the proposed taxation measures and provide relief to the salaried class by restoring deductible allowances in the computation of their taxable income. This, they argue, would alleviate their financial burdens and promote a more equitable tax system.