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ISLAMABAD: Salaried class has launched a campaign against the substantial increase in the incidence of tax on individuals under the Finance Act 2023.

In this connection, the salaried class under the banner of ‘Save the Salaried Class’ has launched a country-wide campaign.

Budget 2023-24: ‘high earners’ to pay a higher income tax as govt revises rates

According to the representation to Finance Minister Ishaq Dar, “we are writing to address the recent imposition of further direct taxation measures on the salaried class, specifically the 2.5 percent increase in taxes coupled with changes to income slabs. These changes have severely impacted the financial burden on salaried individuals.

“Increase is over and above the exorbitantly high tax burden already passed to the salaried class via Finance Act 2023 where not only the tax rates were increased substantially, but also several tax credits were withdrawn.

“The salaried class is already grappling with the harsh realities of high inflation, increased GST, elevated petroleum levies, escalating energy costs, and limited employment opportunities.

“The proposed tax rate hike and alteration of income slabs will significantly reduce their net disposable income, further straining those who are already struggling to make ends meet. Thus, the proposed changes will severely impact the salaried class.

“Moreover, the substantial devaluation of the Pak rupee against major currencies has resulted in a significant decrease (over 50 percent) in the purchasing power of the salaried class. They are finding it increasingly challenging to meet their daily expenses and manage their households.

FBR issues increased income tax slabs for salaried class

“It is crucial to note that private sector employees, who constitute the majority of the workforce, have not experienced salary increases in line with the escalating inflation rates. In contrast, government employees and select sectors have seen their incomes rise, exacerbating the income disparity between different segments of society.

“Unlike businesses in corporate, industry, trade, and service sectors, salaried individuals are not allowed to claim their expenses against their income, further limiting their ability to manage their finances effectively. It is worth highlighting that in the previous budget, the government withdrew tax shields on investments, adding to their financial burdens.

Additionally, in prior budgets, major claimable expenses for the salaried class have also been eliminated. Consequently, within a short span of time, the tax burden on the salaried class has significantly increased, creating severe financial hardships. The effective tax rate on the salaried class is the highest among all income sources.“

The salaried class has strongly urged the government “to explore alternative avenues for generating tax revenue, such as focusing on the wholesale and retail trade sector, which contributes a significant 18 per cent to the GDP, but its tax contribution remains disproportionately low at only one per cent.

Similarly, other sectors are also not contributing sufficiently to tax revenue in comparison to their share in the GDP. “There are legal matters in bringing those strata of the economy into tax net but squeezing the already taxpaying sector of the economy is sheer injustice for one sector only. Implementing fair taxation measures across all sectors would ensure a more equitable distribution of the tax burden.

“The salaried class comprises law-abiding citizens who hold integrity as a fundamental value. They do not engage in illegal income generation. “However, the persistently high inflation, which has hovered around 38 per cent for several months, has further exacerbated their financial challenges, making it increasingly difficult for them to meet their basic needs.

“In light of these concerns, we request the finance minister to reconsider the proposed taxation measures and provide much-needed relief to the salaried class by restoring deductible allowances in the computation of their taxable income.

This would help alleviate their financial burdens and promote a more equitable tax system.“

Copyright Business Recorder, 2023

Comments

Comments are closed.

Maqbool Jul 09, 2023 07:32am
Dar be fair, whatever perks are allowed tax free to government servants must equally be available to Salaried and other tax payers. It’s strange those being paid from the people tax from the private sector income , enjoy more privileges than those that pay their salaries . Or tax everyone equally .
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Arif Jul 09, 2023 08:18am
Since Mr Ishaq Dar isnt an economist so he always has no clue how to increase tax collection as he is INCOMPETENT with high EGO. This isnt the first time he has butchered the salaried class. Retailers and wholesellers are his close friends and we all know these people will not pay tax and Mr Ishaq is ok with it. In a country where a legal cover is provided to a person who doesnt file a tax return and is awarded a status of Non Filer. PML N will be wiped out in coming election this is what we pray inshaAllah.
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Abdullah Jul 09, 2023 11:11am
Why resist.Infact put pressure to tax the rich.
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Yamin Khan Jul 09, 2023 11:24am
Instead of stopping leakages in 18 % get and not implementing tax on retailers they have easy way to increase salary class tax. Only private sector employees are suffering they don't have rebates on consumables in salary eve paying tax on medical, fuel and car maintenance allowances which they are consuming. On other hand private sector do not increase salaries on government announced rates. Salary class pay direct income tax and indirect sales tax 18% on each item buying and get nothing against it only 10000 PKR monthly after retirement.
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Abid ur Rehman Jul 09, 2023 11:43am
Govt. should consider the request of Salaried Class, and reduce the tax rate with allow rebates which were available prior to tax year 2022.
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Adnan Aziz Jul 09, 2023 11:53am
Unless you come on the roads with stones and 'dandas' (sticks), none is going to listen to you, Mr. Dar the least. Nobody questions manifold rise in his bank balance which he took away in his brief case when he fled the country last time. What sort of department NAB is? Does a change in command at NAB mean that black will be turned white and vice versa? The government needs to be told that the salaried class and the pensioners are the most crushed right now. An electrician joins two wires and demands a minimum of one thousand rupees. A plumber tightens a screw and demands a similar amount and so on. As their charges are undocumented, they do not pay any tax. The simple formula in this country is: If you pay the taxes, you will be asked to pay more. If you do not pay any taxes, you need not pay any. The salaried class will pay for the latter country. What a country!
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Kashif Jul 09, 2023 12:49pm
Brutal prclactises against salaried class. Allowances are given to govt. Officials, judges and army are not taxable. Why?? Is there any resoanable rational to give retirement benefits to chairman sanat.
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Junaid Jul 09, 2023 03:07pm
Salaried class is target of multiple and conpubd Taxs but, all the big shots are not. Example, none of Famous food chains are paying any GSTs, nor give POS recipts, where as they charge. Have submitted so many conplaints but nothing. Any one can go and check it any where.....
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Shahid Iqbal Jul 09, 2023 03:52pm
We request FM to take back this recent and Unjustified imposition of tax on salaried class. We are already paying lot of taxes.
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Mohammad Anwar Jul 09, 2023 04:01pm
No high taxes on elite class and no tax on agriculture income is unjustified.
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Mohammad Anwar Jul 09, 2023 04:08pm
How many members of assemblies and Senate pay full taxes on elite their income. How many are filers ? FBR should public the facts honestly.
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Jamshed Jul 09, 2023 04:08pm
Dar sb has done wonders thanks to genius of Nawaz Sharif. Shameless salaried class always lying and crying. Pay your due share!
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Mohammad Anwar Jul 09, 2023 04:16pm
FBR makes unrealistic tax collection targets just to please finance minister. Who has no economic black ground.
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Mohammad Anwar Jul 09, 2023 04:18pm
Only salaried class is an easy target for FBR They have no courage to tax elite class and feudals class.
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Muhammad Naeem Baig Jul 09, 2023 10:58pm
please share and let us know how to help promote this cause for the sake of Salaried Class.......
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Muhammad Rehan Taj Jul 10, 2023 12:27am
Only salaried class is an easy target, why should tax is imposed on agriculture earnings, retailers etc ...... Why we pay taxes even no facilities are being provided by government such as other European countries provide to taxes payer. In our country 1- for Better medical treatment private hospitals 2- For better education private 3- Private transportation 4- To pay sweeper by our self instead of government. 5- Private Guard for security 6- No water
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Arslan Jul 10, 2023 10:30am
We are ready to pay further more taxes but Authorities should take care our rights as mentioned below. 1. Hospitalization. Kindly provide the same facilities in Government Hospitals as we received in Private one. 2. Education. Provide same level of education do not discriminate in course as two system of education is running in country. Pay attention 3. Justice: Keep attention to cases and give justice on equality basis instead of power basis. Hope our state is ready to meet the basis need of their citizen.
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junaid Jul 10, 2023 11:00am
Please look into it. It is not fair. private sector do not increase salaries on government announced rates. Salary class pay direct income tax and indirect sales tax 18% on each item buying and get nothing against it only 10000 PKR monthly after retirement.
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Ehsan Jul 10, 2023 12:00pm
@Jamshed ,salaries are already taxed and in most cases the tax is deducted at source and deposited to FBR. The sad reality is the salaried class is paying for its own lifestyle of working for salary. The issue some want to point out is incidence of taxation in theory tax is paid on everything by salried from tooth paste petrol gas food items and durable and consumables. But not sure if it is deposited by retailer in government coffers. Similarly restaurants charge 16% tax on every meal but not sure if it's deposited or just deposited in the restaurant owners own account. Pos is a good initiative by fbr.Not sure if there is some loop hole to delete transactions from POS record. Maybe encouraging raast SBP and digital payments on microlevel will ENSURE tax collections and not just burdening the salaries classes who are paying above due share. Loans are also expensive which was respite to salaries classes in private sector. Now affording 25% loan is simply not possible. Gov incompetent.
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Ehsan Jul 10, 2023 12:05pm
Yes I understand it doesn't matter who is the finance minister incompetent like dar or anyother person the loans are being paid back and new loans are taken out. So it's understandable that taxes would go upveven on the salried people. Salried people are facing global phenomenon of only two classes rich and poor and disappearing middle classes. It's not just limited to Pakistan.
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Sabir Hussain Jul 10, 2023 12:05pm
Tax payers have no extra benifits in their daitly routine activies. if government want to increase the tax it should also insure that every salaried person of any organization also gets 35% increase as announced for government employess. Private organizations do not approve such increase in salaries.
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TALHA SHAFI Jul 10, 2023 01:05pm
On average mere 5-7% increments are awarded yearly to employees in private Companies & FI's. Continuously squeezing private sector employees against income tax burden will eventually burst one day. Duffers/Cheaters sitting in power corridors find private sector employees easy target, instead of bringing tax evaders in law ambit. This time even groceries are out of reach for private sector employees and one has to further narrow down the necessary requirement list.
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Humaira Nadeem Jul 10, 2023 02:09pm
Unfortunately, the easiest and only way available to our "finance masterminds" is to tax the documented, while the undocumented go scot -free.
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Munawer Ali Jul 10, 2023 03:41pm
In these times of abnormally high inflation, it's strange slabs of income have not been revised upwards. We are paying taxes multiple times on the same income which is already highly taxed. Now look at perks of government officers, judges and army personnel: 1- Free Residence for army personnel families where they don't have to pay for electricity and gas 2- Marginal Cost to government of managing numerous cantonments for army personnel 3- Free Petrol, Drivers, Servants, Electricity Units, Mobile Allowance, Fuel Allowance, Office maintained cars for reasonably large number of government officers Private sector employees are suffering heavily, where entire earning is drained to pay utilities and taxes........
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MYW Jul 10, 2023 03:51pm
This is not plausible that way the salaried class is being asked repeatedly to contribute and makeup the deficit created by others. This is neither understandable nor possess any hint of sense that the circumstances in which Pakistan is in, is actually drawn in by the hard earning common people. Nearly all burden has been directly and indirectly passed on this class whether by increasing tax rates, withdrawing credits which they generate out of their own hard earned money, ending due tax allowances, and the unprecedented inflation. Simply no one has a clue or justification that what wrong the salaried class has done to the country?
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Mutmain Jul 10, 2023 08:28pm
Bus handlers should be happy.
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Tariq Qurashi Jul 11, 2023 09:38am
As usual it is existing tax payers that bear the brunt of any increases in taxes. It is about time the FBR made an effort to bring new tax payers into the net. Maybe incentives and targets can be given to the FBR officials to do this. There are also large powerful lobbies, that have considerable political clout, that resist being brought into the tax net. It is difficult for any political government to take action on this front just before an election. Maybe the interim government should bite the bullet and take these difficult decisions.
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Usman Jul 11, 2023 10:48am
@Jamshed , What wonder has Dar done except brining more shame to himself. He totally failed in all aspects be it PKR value, inflation, taxation, IMF and a long list. He should be thankful to Shebaz Sharif for his efforts to secure IMF deal which was ruined by Dar.
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