Salaried Class Forced to Pay Extra Rs. 120 Billion Income Tax in 8 Months

The salaried class paid Rs. 331 billion or Rs. 120 billion more in income tax during the first eight months of the fiscal year due to back-breaking living costs and zero social benefits. This is 1,350 percent more than the Rs. 23 billion collected from retailers. Despite this heavy tax burden, the government did not seek any relief for salaried individuals during recent review talks with the International Monetary Fund (IMF). Compared to last year, salaried employees have already paid Rs. 120 billion more in taxes, Rs. 45 billion more than the government’s target of Rs. 75 billion for the entire fiscal year. Meanwhile, the government’s attempts to expand the tax net for traders failed. The Tajir Dost scheme has fallen far short of its Rs. 50 billion tax target. The government attempted but failed to negotiate lower taxes for the real estate sector with the IMF. Finance Minister Muhammad Aurangzeb has directed the Federal Board of Revenue (FBR) to review taxation on salaries, but no discussions with the IMF have taken place. Meanwhile, the tax machinery is struggling to meet its overall tax target of Rs. 12.97 trillion for the fiscal year, already facing a shortfall of Rs. 605 billion. For March, it must collect Rs. 1.22 trillion, but only Rs. 515 billion has been collected so far and a major shortfall is expected before the Eid holidays.