Karachi: The Employed Class Alliance of Pakistan (SCAP) called on the government to immediately relieve the employee segment in the next 2025-2026 financial budget, quoting tax charges on Thursday disproportionately, increasing inflation and worsening of economic conditions, according to a statement published Thursday.
According to the Alliance, employees, including government and private employees as well as media professionals, banks, education sectors and companies, are the only segment that pays for their share of income tax without any adjustment. Despite this, they brought the weight of recent budgetary policies, including an increase in slabs and an additional 10% on higher income, introduced in the last budget. “The middle class has been crushed. Although inflation has doubled in the past three years, the minimum taxable income threshold remains blocked at 50,000 rupees per month,” said the SCAP.
The SCAP urges the government to increase the minimum taxable income threshold to Rs 100,000 per month and restore tax rates at 20122. The government should reduce its expenses to grant relief to higher taxable taxpayers and eliminate the supplement of 10%. This supplement acts as a penalty for timely tax payments and is unfair to compliant taxpayers. The salaried class requires an immediate recovery of tax credits.
The alliance warned that the continuous neglect of this segment contributes to the worsening of the fears of the country. The emigration of qualified and educated professionals would have jumped 119% in the past year, with high taxation quoted as a key factor. In addition, the SCAP underlined the structural tax inequalities. During the 2010 financial year, employees are estimated at more than 550 billion tax rupees, compared to only 100 billion rupees collectively paid by exporters and retailers.
The agriculture sector, contributing to almost 20% of GDP, contributes to less than 1.0% of tax revenues. Some privileged owners and groups benefit from large exemptions, while employees are facing tax rates of up to 35% with an additional 10% surcharge.
The alliance was also expressed in the concern of increasing informality in the economy, where companies choose to pay cash salaries to avoid high tax deductions, undermine documentation and long -term development.
The Alliance stressed that fair taxation is essential not only to economic justice, but also to the prevention of the erosion of the country’s skilled workforce and to the promotion of sustainable economic development.
