ISLAMABAD:The struggling salaried class has paid a record Rs391 billion in income tax during nine months of this fiscal year, a highly discriminatory taxation where 10% of the total income tax collected from across Pakistan is now paid by salaried individuals.
Compared to Rs10 that the salaried class paid in taxes during July-March period out of every Rs100, the blue-eyed traders contributed merely 60 paisa.
Income tax payments during the nine-month period of this fiscal year were Rs391 billion, Rs23 billion more than the total income tax the salaried class paid during the 12-month period of the previous fiscal year, according to provisional collection estimates compiled by the Federal Board of Revenue (FBR).
During the July-March period, the FBR had collected Rs4.1 trillion in total income tax. The payments by salaried persons alone were nearly 10%, showing how the marginalised voiceless segment is overburdened by the government. Last year, this ratio was 7.5%.
The government of Prime Minister Shehbaz Sharif had targeted an additional Rs75 billion in income tax from the salaried class for the full fiscal year 2024-25. However, the figure has already surpassed Rs140 billion, with three months still remaining in the fiscal year. Income tax from the salaried class in the last nine-months has increased by 56% compared to the previous fiscal year.
Last year, the salaried class paid Rs368 billion in taxes. However, despite this backbreaking burden, where salaried individuals are taxed on their gross income without adjustments for expenditures, the government did not raise the issue of alleviating this burden during its recent talks with the International Monetary Fund (IMF).
“We are considering alternate options to reduce the burden of the salaried class without compromising progressivity in taxation,” said Dr Najeeb Memon, the spokesman of the FBR.
The IMF team is arriving in Pakistan on May 14th to vet the next fiscal year’s budget before it is presented in the National Assembly around June 4th, according to sources. The IMF team will stay till May 23rd.
In contrast to Rs391 billion paid by the salaried persons, the retailers, mostly unregistered, contributed only Rs26 billion on account of withholding income tax on their purchases. The amount of tax that traders paid under section 236-H was 1,420% less than taxes paid by salaried persons.
