Finance Bill 2025–26: Salaried class demands substantial relief

KARACHI: With deep concern and in the spirit of national responsibility, representatives of Pakistan’s salaried class have raised alarm over the proposed measures in the Finance Bill 2025–26, which they believe continue to unfairly burden the most compliant segment of taxpayers.

Over the past six years, the salaried class has seen its tax contribution rise from Rs 76.44 billion in FY19 to a projected over Rs 550 billion in FY25, an increase of nearly 719 percent. However, this surge does not reflect income growth, but rather the impact of inflation, lack of indexation, and withdrawal of essential tax credits on education, insurance, and investments.

Addressing a press conference at Karachi Press Club (KPC) on Thursday, Addel Ahmed and Eisha Fazal of Salaried Class Alliance Pakistan said that the salaried segment, whose taxes are deducted at source and who remain fully documented, continues to face punitive policies including exorbitant tax on pension funds, particularly penalizing retirees with modest non-pension income; increase in tax on mutual fund and bank profits, discouraging regulated savings and long-term investment and continued 10 percent surcharge on high-earning individuals, while informal and undocumented sectors remain largely untouched.

They said that despite public promises of relief, the current proposals fall short.

They demanded meaningful relief in Finance Bill for FY26 and urged for raise the tax-free salary slab to Rs 100,000 per month, adjusting for inflation.

In addition, they demanded restoration of earlier slab rates, including a reduction of the top slab from 35 percent to 32.5 percent and 30 percent to 27.5 percent second last slab and keeping the tax rate for lowest slab at 1 percent as per budget speech.

“Government must also reinstate tax credits for insurance, education, and investments and withdraw the 10 percent surcharge and ensure uniform treatment of all taxpayers,” they added.

They urged the government to widen the tax net, targeting the largely untaxed wholesale, retail, and agricultural sectors.

They said that the 2.5 percent slab rate reduction and minimal surcharge cut are noted, they are far from sufficient. The salaried class is not asking for favors but only fairness, they added.

Salaried Class Alliance urged the policymakers to show compassion and take corrective action before finalizing the Finance Bill. A just tax policy is essential to restore public trust, prevent brain drain, and secure Pakistan’s economic stability, they believed.

Copyright Business Recorder, 2025