It’s no secret that the brunt of taxes is bored by a small percentage of citizens while the rich enjoy the fruits of the labor of the common people. The budget for 2023-2024 didn’t make it any easier.
Salaried individuals have initiated a movement protesting the burden of excessive taxation imposed on them per the Finance Act of 2023. The “Save the Salaried Class” movement has been launched nationwide, uniting salaried individuals in their cause.
A letter sent to Finance Minister Ishaq Dar expresses concerns about introducing new direct taxation measures affecting the salaried class. The representative explicitly highlights the 2.5 percent tax hike and adjustments to income brackets.
The salaried individuals are already facing the harsh challenges of soaring inflation, rising GST, heightened petroleum levies, mounting energy expenses, and limited job prospects.
The proposed increase in tax rates and changes to income brackets will considerably diminish their disposable income, adding further strain to those struggling to meet their financial obligations.
While businesses operating in the corporate, industrial, trade, and service sectors can claim their expenses against their income, salaried individuals are not granted the same privilege. This disparity further restricts their capacity to manage their financial matters efficiently.
It is important to emphasize that in the previous budget, the government abolished tax shields on investments, exacerbating the financial burdens of individuals. Furthermore, significant deductible expenses for the salaried class have also been eliminated in previous budgets.
As a result, the salaried class has experienced a rapid escalation in their tax burden, leading to severe financial difficulties. The effective tax rate imposed on salaried individuals is now the highest among all income sources.
The salaried class has appealed to the government to explore alternative tax revenue sources. Other sectors must adequately contribute to tax revenue in proportion to their respective shares in the GDP.