Business & Finance

Fear comes alive: all salaried persons earning over Rs50k a month to bear higher taxation in FY25

  • Govt maintains number of tax slabs at 6 and exemption till Rs50,000, but increases tax liability for all other salary earners
Published June 12, 2024

The fear of Pakistan’s salaried group became reality on Wednesday as the government increased tax liability for all persons earning more than Rs50,000 a month in Budget 2024-25.

Tax slabs in Finance Bill 2024 reveal that the highest impact would be on anyone earning equal to or more than Rs6 million a year (Rs500,000 a month). The tax liability for these earners increases by Rs22,500.

Interestingly, the tax increase for salaried persons earning as high as Rs12 million a year (Rs1 million a month) is also Rs22,500.

While the government did not touch the income tax exemption threshold – which still stands at Rs50,000 – liability has increased across all other levels of salaries. For example, a person earning Rs100,000 a month will now pay Rs2,500 a month, up from the earlier level of Rs1,250.

 Source: Finance Bill 2024
Source: Finance Bill 2024

 Source: Finance Bill 2023
Source: Finance Bill 2023

The government had also imposed a higher income tax on salaried persons last year on what it saw as ‘high earners’.

PERSPECTIVES: Pakistan’s salaried group is rightly anxious ahead of the budget

Finance Minister Muhammad Aurangzeb, during his budget speech, said the government did not change the number of slabs. While the number of slabs did not in fact change, the composition within them changed drastically.

In an article written by this correspondent two days ago, it was stated that during the outgoing fiscal year, the salaried group has contributed around Rs330 billion in 11 months.

“This amount is projected to stand at Rs360 billion over the entire fiscal year, a phenomenal 36% increase during a year when inflation stood at an average of 24.5% in 11 months of the outgoing fiscal year,” it was written in the article.

Income tax calculator for FY 2024-25


Bilal Memon

Bilal Memon is the Head of Digital Content at Business Recorder. His Twitter handle is @bilalahmadmemon

Comments

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KU Jun 12, 2024 11:28pm
Salaried class who haven't seen raise for many years should pay more so that 3 million Baboos can enjoy royal lifestyle, n black economy shall thrive under protection of govt. What a lie we live in.
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AB Jun 13, 2024 12:32am
@KU, True and a sad reality. Over the last few years the salaried class was the most to pay taxes and not get raises
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Usman Jun 13, 2024 08:17am
@KU, but salaried class will never support the formalisation of black economy and digitalisation of economy and they suffer.
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Javid Jun 13, 2024 04:57pm
I think current Govt. don't consider salaried class as their vote bank
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Ch K A Nye Jun 13, 2024 08:39pm
@Javid , The lazy fbr who find the salaried the easiest to squeeze money out of. With real estate, retailers etc., they have to do real work. The salaried can't go on strike, have violent protests
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Love Your Country Jun 14, 2024 08:04am
The most unfair, the most evil and cruel step targeted at the lowest rung of the ladder. This may be raised during the assembly debate at the request of the parliamentarians... let's see.
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Love Your Country Jun 14, 2024 08:15am
Interesting - at the top end the rate stays 35%! Why not raise the rate or create another slab? The 2nd slab goes up 100% (2.5% to 5%) to hit the white collar hard as if they're milking the economy!!
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Omer Jul 01, 2024 12:12pm
Just remember voting will bring the change, you need to stand united for your write, no matter whoever is in govt. they won't respect your right.
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