Finance Minister pledges tax relief for salaried class at earliest opportunity

WEB DESK: Federal Minister for Finance and Revenue Muhammad Aurangzeb has assured that the government aims to alleviate the financial burden on the salaried class at the earliest possible opportunity.

Aurangzeb, the former CEO and President of HBL, made these remarks during an interview on Aaj News. Addressing the significant tax pressures faced by Pakistan’s salaried employees, he stated, “I understand their pain and empathize with them. The first opportunity we get, we will provide relief to them.”

As of July 1, 2024, Islamabad has implemented new taxation measures totaling Rs1.761 trillion through the Finance Act 2024. These measures include increased taxes on the salaried class and substantial indirect taxes on the general public, such as sales tax on stationery, dairy products, and poultry feed.

According to Business Recorder, the Finance Act 2024 introduces Rs443 billion in income tax measures and an increase of Rs224 billion in personal income tax (PIT). Initially, the Finance Bill 2024 indicated that individuals earning Rs6 million or more annually (Rs500,000 per month) would face the highest tax impact.

However, an amendment added a 10 per cent surcharge on individuals and associations of persons with an annual income exceeding Rs10 million.

These dual taxation measures have sparked widespread criticism among Pakistan’s working professionals, who argue that the formal and tax-compliant sector is disproportionately affected.

While the income tax exemption threshold remains at Rs50,000, tax liabilities have increased across all salary levels. For instance, an individual earning Rs100,000 per month now pays Rs2,500 in taxes, up from the previous Rs1,250.

In addition, Aurangzeb mentioned that the government has introduced measures to compel non-filers to enter the tax net, aiming to broaden the tax base and enhance compliance.

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