Govt Aims to Ease Tax Burden on Salaried Class

The government has acknowledged the financial strain on the salaried class due to taxation and reaffirmed its commitment to reducing their burden when economic conditions improve. The discussion was initiated in the National Assembly through a Calling Attention Notice raised by Sharmila Faruqui Hashaam and Asiya Naz Tanoli, drawing the Minister for Finance and Revenue’s attention to the excessive tax burden on salaried individuals. The lawmakers highlighted that the current tax structure is creating severe financial hardships and causing grave concern among the public. Speaking on the matter, Minister of State for Railways Bilal Azhar Kayani emphasized that the government is on a path to fiscal and macroeconomic stability while implementing an International Monetary Fund (IMF) program. He highlighted that tax collection by the Federal Board of Revenue (FBR) has increased by 26 percent in the current fiscal year, reaching Rs. 7,345 billion by February, compared to Rs. 5,891 billion in the same period last year. Additionally, the primary surplus—the government’s revenue minus expenditures, excluding interest payments has almost doubled from Rs. 1,938 billion last year to Rs. 3,518 billion this year. Kayani stressed that broadening the tax net would help distribute the tax burden more fairly, ensuring that the salaried class does not bear an excessive share of the responsibility. “The Prime Minister has repeatedly committed that as soon as economic conditions improve, the burden on the salaried class will be reduced,” he said. Providing statistics, Kayani noted that out of 4.2 million salaried taxpayers, 3.2 million earn an annual salary of 1.2 million rupees (Rs. 100,000 per month) or less. Most earn around Rs. 600,000 per year (Rs. 50,000 per month) and are exempt from income tax. Those earning Rs. 1.2 million annually pay Rs. 28,000 in tax. Despite these figures, the government recognizes the need to further ease their tax burden. Meanwhile, the government has successfully increased tax compliance among retailers. The number of filing retailers has tripled from 200,000 to 600,000 this year, and tax collection from this sector has surged from Rs. 190 billion to Rs. 425 billion. Kayani also addressed concerns about inflation, stating that the government has taken significant steps to reduce inflation to a historic low of 1.5 percent. He emphasized that improving purchasing power can be achieved in two ways: increasing incomes and reducing inflation. He assured that the government is working on both fronts, particularly in controlling prices of essential commodities. “In the past year, we have seen significant improvement, and in the coming year, people will witness further increases in their disposable income and purchasing power,” Kayani added.