KARACHI: The Salaried Class Alliance of Pakistan (SCAP) has called on the government to provide immediate relief to the salaried segment in the upcoming Finance Budget 2025-2026, citing disproportionately high tax burdens, rising inflation, and worsening economic conditions.
According to the Alliance, salaried individuals, comprising government and private employees including professionals in media, banking, education, and corporate sector, are the only segment paying its due share of income tax, without any adjustment, in Pakistan. Despite this, they have borne the brunt of recent fiscal policies, including increased slab rates and a 10 percent surcharge on higher incomes, introduced in the last budget.
“The middle class has been crushed. While inflation has doubled in the past three years, the minimum taxable income threshold remains stuck at Rs 50,000 per month,” the SCAP representatives said in press conference here on Thursday at Karachi Press Club. Saif Tirmizi, Hasnain Ashraf, Nasir Hussain Taibani, Komal Ali, Adeel Khan and Rizwan Hussain of the Alliance were present at the Press conference.
The Alliance warned that continued neglect of this segment is contributing to the country’s worsening brain drain. Emigration of skilled and educated professionals reportedly surged by 119% over the past year, with heavy taxation cited as a key factor.
Moreover, the SCAP pointed to structural tax inequalities. In FY25, salaried individuals are estimated to contribute more than Rs 550 billion in taxes, compared to only Rs. 100 billion collectively paid by exporters and retailers. While, the agriculture sector, contributing nearly 20 percent of GDP in the economy, however contributes less than 1 percent in tax revenue.
They said that some landlords and privileged groups enjoy vast exemptions, while wage earners face tax rates as high as 35 percent with additional surcharge of 10 percent.
Additionally, the Alliance expressed concern over growing informality in the economy, where businesses opt to pay salaries in cash to avoid high tax deductions—undermining documentation and long-term development.
Salaried Class Alliance Pakistan demanded the government that to raise the minimum taxable income threshold to Rs. 100,000 per month and restore tax rates to FY22 levels.
They also urged the government to reduce expenditure to support relief for higher tax rate taxpayers and abolish 10 percent Surcharge, as it is nature of penalty being tax on time and in unfair to levy on compliant taxpayers.
They also suggested for re-introducing of tax credits and immediate reinstatement of tax credits. In order to widen the tax net by bringing untaxed sectors such as agriculture and informal businesses into the fold, they urged.
The Alliance also emphasized that fair taxation is essential not only for economic justice but also for preventing further erosion of the country’s skilled workforce and promoting sustainable economic development.
Copyright Business Recorder, 2025
Comments
Comments are closed for this article.