The salaried class has initiated a campaign against the heavy taxation imposed on them under the Finance Act 2023. Concerned about additional direct taxation measures, they have launched a country-wide campaign called “Save the Salaried Class.”
Letter to Finance Minister Addresses Taxation Concerns
The salaried class representative has written a letter to Finance Minister Ishaq Dar, highlighting concerns about the recent implementation of additional taxes and changes to income slabs. The letter emphasizes the financial burden imposed on salaried individuals.
Financial Hardships Faced by the Salaried Class
The salaried class already faces economic challenges, including high inflation, increased GST, elevated petroleum levies, escalating energy costs, and limited employment opportunities. The proposed tax rate hike and alterations to income slabs will further reduce their net disposable income, straining those who are already struggling.
The letter points out that the devaluation of the Pakistani rupee has significantly decreased the purchasing power of the salaried class, making it difficult to meet daily expenses and manage households.
Furthermore, the letter highlights the disparity between private sector employees and government employees, exacerbating the income gap. Private sector employees have not received salary increases in line with escalating inflation rates, while government employees and select sectors have seen their incomes rise.
Limitations Faced by Salaried Individuals in Managing Finances
Unlike businesses in corporate, industry, trade, and service sectors, salaried individuals are unable to claim expenses against their income, hindering effective financial management. The government’s withdrawal of tax shields on investments and elimination of major claimable expenses have further added to the financial burdens faced by the salaried class.
Consequently, the tax burden on the salaried class has increased significantly, with the effective tax rate being the highest among all income sources.
The salaried class urges the government to explore alternative avenues for generating tax revenue, such as focusing on the wholesale and retail trade sector. Despite contributing significantly to the GDP, the tax contribution from this sector remains disproportionately low. Implementing fair taxation measures across all sectors would ensure a more 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. The persistently high inflation has further exacerbated their financial challenges.
In light of these concerns, the salaried class requests the finance minister to reconsider the proposed taxation measures and provide relief by restoring deductible allowances in the computation of their taxable income. This step would alleviate their financial burdens and promote a more equitable tax system.
