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Pakistan

Govt to see if it can ‘protect’ Pakistan’s salaried class further, says Aurangzeb

  • Finance minister says additional taxes could have been imposed, but salaried class was 'protected'
Published June 22, 2024

Federal Minister for Finance and Revenue Muhammad Aurangzeb has said that the government will look at how the salaried group can be protected after new measures increased its tax burden in the recently announced Budget 2024-25.

Talking to Geo News on Thursday, the finance minister said the government tried to “ring-fence the salaried class as much as it could”.

“I agree,” said Aurangzeb as he responded to a question on taxing Pakistan’s salaried group further. “I have worked for six years, I know what the tax brackets were, what the super tax was, what CVT was imposed.

“We made a lot of effort to protect them.”

Aurangzeb said persons earning less than Rs600,000 annually remained exempted from income tax.

“We also protected the highest bracket of 35%. We could have imposed more taxes on this segment, but they were protected as we feared talent would leave the country,” he said.

“We are reviewing how much relief we can provide to the tax slabs,” he said.

The Finance Minister said as the government targets to increase its tax revenue from Rs9.4 trillion to Rs12.9 trillion, it needs to increase its revenue by Rs3.5 trillion.

“We will generate Rs1.5 trillion through additional revenue measures by removing exemptions and imposing more taxes,” he said.

Aurangzeb shared the total impact of the additional tax measures on the salaried class is around Rs70 billion out of Rs1.5-1.6 trillion.

The remarks come after 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.

On Friday, lawmakers including allied political parties lambasted the government for imposing more taxes on the salaried class and facilitating the ‘holy cows’ – especially the real estate and agriculture sectors – through subsidies and exemptions.

Taking part in the budget debate in the National Assembly, they said that the imposition of such heavy taxes on the salaried class is simply irrational, which may lead to an acceleration of brain drain from the country.

They called for drastic changes – through incorporating the budgetary proposals from the MPs – in the federal budget to give more relief to the masses and bring the holy cows under the tax net, as this is the time to tighten the noose around the tax evaders.

Pakistan’s salaried group has seen taxation burden increase massively over the last few years as the government looks at what many call ‘soft targets’. In its attempt to increase tax-to-GDP ratio, it has often come under criticism for taxing Pakistan’s formal sectors and not going after informal sectors enough.

Comments

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KU Jun 22, 2024 02:41pm
Everyone agrees that we are wading into dangerous waters at the behest of corrupt FBR advisors who are only interested in protecting untaxed sectors, including black economy. Its now FBR vs Pakistan.
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EQ Jun 22, 2024 03:17pm
Protection is slab would have increased with inflation. 50k is now a very low value. What is current 50k is 20k salary a few years back. So if salary is increasing with inflation bracket increases.
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Fahad Jun 22, 2024 03:35pm
Its just lip service.. he is proving himself incompetent
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Wasif Farooqi Jun 22, 2024 03:54pm
Why all segments of society are not taxed equally. Why those,opening courts at night in the name of Human Rights, forget their duty on equal tax rates for all Pakistanis. Where is the justice?
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FAN Jun 22, 2024 04:07pm
It's so easy to tax the salary class. Wish they had the guts to think bigger and tax the elite who will never share their wealth but will always rule over us. Nonsense
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Imran Jun 22, 2024 04:16pm
Government has completely failed in taking sensible measures to tackle the economic issues. Taxing people manifold for revenue generation. When the salary is paid tax is already deducted. When people consume electricity, Gas they are taxed. When they buy groceries they pay taxes. In return of taxes what is provided?? Poor sanitation, no facility of drinkable water. Poor transportation infrastructure.
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Maqbool Jun 22, 2024 04:30pm
Why can’t retirees, who have paid Tax all their working lives be included along with Salaries brackets instead of being bracketed with AOPs ? Better still one bracket for all single Tax payers
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Usman Jun 22, 2024 05:18pm
@Wasif Farooqi, did you look for justice when they installed him in 2018.Had you looked than you would not face this situation today.
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Aizaz Jun 22, 2024 05:25pm
This finance minister is also of same pedigree who has no vision of how to make the economy of the country strong. Although he is a banker who has been drawing 10 million a month,cannot tax properly
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Nouman SABIR Jun 22, 2024 05:26pm
Govt should charged extra tax to the (employer) Like Turnover tax instead increase the rate of the taxes to employees. In service sector. Where companies earning depending on the employees skills.
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Owais Jun 22, 2024 05:35pm
The finance minister the so called professional has done norhing in this budget. no value addition just copy paste of previous budget Do something new
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Mubashir Jun 22, 2024 05:41pm
Why the exception on property and agriculture?
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Iftikhar Jun 22, 2024 06:02pm
What relief!!?? A fixed charge of Rs.1000 added to the electricity bill!!! For what when people are paying so many taxes already.
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ZA Jun 22, 2024 07:22pm
Stupid does what stupid sees. Aurangzeb looks like an IMF program peddler.
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Ejaz Jun 22, 2024 08:09pm
Protect Further? It's sarcasm. I think he is talking about adding more burden. These people have no idea about how to increase taxation except adding more on current tax payers and indirect taxation.
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Haseeb uddin Azam Toor Jun 22, 2024 08:48pm
Apni speech ka start IMF se karne wala Foreign Minister govt servant ke saath Yahi kuch kar sakta he.
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Nasrullah Khan Jun 22, 2024 08:54pm
You are worried about 5% salaried but not 95% degree holders who have no job. Share resources responsibly.
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Ahmed Jun 22, 2024 09:42pm
He is turning out to be a worse liar and manipulator than politicians.
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Dawood Mustafa Jun 22, 2024 09:50pm
If u really care for salaried class then tax transporters, estate agents, shopkeepers, animal sellers, all businesses dealing in cash, every Pakistani earning above 50k per month. Do justice.
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Arsalan Jun 22, 2024 10:19pm
Actions speak louder then words. act and reduce the taxes on the salaried class. don't give us crocodile tears. tax the rich not the already dead class of the country!!!!!
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Muhammad aumair Jun 22, 2024 10:25pm
Why increase tax on salary class person please request low tax on salary class and more increase tax on exporter due to misused DLTL scheme program for illegal investment Allah ka shukar hai DLTL clos
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A khan Jun 22, 2024 11:22pm
The pakistani stupid politicians and the imported bankers dont care what happens to the Govt employees devoting their life to public service. Pay is dividend i to several parts like ..contd
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A khan Jun 22, 2024 11:23pm
Part 2... 1. basic pay, 2. Other allowances (which are a joke actually, imagine Rs 6000 i.e 20 USD for house rent to a doctor. Where do you get even a room for RS 6000?)... contd
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A khan Jun 22, 2024 11:25pm
Part 3. When they give a pay increase , its only given on basic pay. Everything else remains same. Like when they say 10% inc. It mean for person whose total Pay Rs 60000 and basic pay is 26000..contd
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A khan Jun 22, 2024 11:27pm
Part 4 the net increase would be a mere Rs 2600. a joke. During the past four years. Commodity prices have risen about 150 to 200% While the net inc in pay compared to 4 yr back is merely 25%. Contd
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A khan Jun 22, 2024 11:31pm
Part5 used to take my kids to store weekly to buy few snacks. Now i can only afford to take them once, restrictions on what they can buy. Chocolate costing Rs 60 now costs Rs 280. So thats a big No.
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Maqbool Jun 23, 2024 11:45am
This budget will increase the Black Economy , which our Rulers love so much. Cancel the Rs 5000 note.
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A. Chak Jun 23, 2024 05:52pm
Mr Aurangzeb, you can protect the salaried class by taxing real estate and agriculture. How about you do that first? If not then it's just a bunch of hot air.
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Arsalan Jun 24, 2024 06:35am
nae sir bohut meharbani. phelay hi bari karam nawazi hai aap ki. muaf kardean hamaen!!!
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Fazal Jun 24, 2024 06:26pm
Such a shame that Textile sector is paying less budget as compared to salaried class. This act is disappointing the skilled people and they are trying to move abroad like me.
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syed shafiq ul hassan Jul 08, 2024 03:39am
Guys ! Time to leave the country ...
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