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ISLAMABAD: Federal Board of Revenue ((FBR) Chairman Amjad Zubair Tiwana stated Saturday that the salaried class was contributing Rs375 billion into the national kitty, whereas, exporters were paying only Rs90-100 billion as compared to the salaried individuals. As compared to the Rs375 billion annual contribution of the salaried class, the retailers, who are estimated to be around 3.6 million all over the country, are only paying Rs4-5 billion tax per annum.

The senators were shocked to hear about this unfair taxation regime and unanimously rejected the hike in tax rates of the salaried class in totality.

The Senate Standing Committee on Finance and Revenue continued its day-long meeting here at the Parliament House on Saturday to finalise recommendations on Finance Bill 2024-25.

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

The FBR chairman shared an interesting comparison among the tax contribution of the salaried class, exporters, and retailers’ contribution to the national exchequer.

The committee members seemed divided over the FBR’s move to treat the exporters’ income under the normal tax regime against the earlier tax rate of just one percent of their income.

Senator Farooq H Naek belonging to PPP extended his all-out support to the FBR’s move to bring exporters under the normal regime. He argued that when they could contribute up to 45 per cent as a non-salaried class then why exporters were getting such incentives?

The Chairman of the Committee Senator Saleem Mandviwala, who also belongs to PPP, opposed the FBR move arguing that the exporters were bringing dollar inflows and might stop bringing their inflows into the country.

The chairman FBR said that it was an equity and fair taxation perspective for jacking up tax rates for exporters and retailers as the FBR has estimated that converting exporters into a normal regime would fetch Rs125 billion in additional revenues.

He said that the FBR took steps to bring retailers into the tax net and it is estimated that the tax collection would go up to Rs50 billion from retailers in the next fiscal year against the existing level of Rs4 billion on an annual basis.

About the major raise in salaried slabs, the chairman of FBR informed the committee that the tax slabs were revised upward for salaried class as for slab one the effective tax rate for monthly earners from Rs600,000 to Rs 1,200,000, the tax has gone up from Rs1,250 per month to Rs2,500 per month.

For the tax slab from Rs1.2 million to Rs2.2 million, the tax has increased from Rs11,668 to Rs15,000 per month. For a salaried slab of Rs2.2 million to Rs3.2 million, the tax has increased from Rs28,750 to Rs35,834 per month.

For a slab of Rs3.2 million to Rs4.1 million, the tax has increased from Rs47,000 to Rs58,000 per month.

He said that the IMF demanded to come up with unified slabs for salaried and non-salaried classes and slapped higher rates of 45 per cent. “We remained engaged in intense discussions with the IMF for three days and convinced them to reduce tax rates for salaried class” he added.

Senator Anusha Rehman from PML-N also opposed hiking the tax rates for the salaried class.

The Senate panel also rejected the FBR move for charging a fixed rate for capital gains on real estate and securities of 15 per cent for filers and 45 per cent for non-filers irrespective of the holding period.

Senator Shibli Faraz from PTI said that coercive measures would not help broadening of narrowed tax base.

The senators discussed hiking the tax rates for non-filers from 15 to 75 per cent on the use of mobile phones for persons whose names are appearing in the income tax general order for non-filing of returns even after issuance of notice.

Copyright Business Recorder, 2024


Comments are closed.

Arsalan Jun 16, 2024 06:23am
what the govt wants to do it does. then some act as if they really care for the salaried class. in real they reject capital gains for retail estate, but only talk n no action for the poorest class!!!!
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Shahneela Farhan Jun 16, 2024 10:49am
The finmin has the audacity to tell salaried ppl 2 bear the burden while drinking H2O from a premium glass bottle which is priced even more than previously used plastic bottles, wasting my tax money.
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Aamir Jun 16, 2024 11:24am
That is not much...Itna shor kia hota hai jaysay Sara mulk salaried class hi Chala rahi hai.
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irfan daud Jun 16, 2024 03:28pm
The growth trajectory was nosedived because Education (School/Colleges/University) was privatized. The result is in front of us. Degrees without skills and poor policy making.
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Maqbool Jun 16, 2024 07:07pm
the salaried class was contributing Rs375 billion Yet the Tax free government Pensions take rs 10 trillion out of FBR total of Rs 12 trillion Tax collection
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Fiyaz Jun 17, 2024 12:01am
To be fair the number of tax payers of the categories should also be mentioned against the Tax collected.
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