Pakistan salaried class rejects govt's claim of giving relief in income tax
Representatives of the Salaried Class Alliance of Pakistan (SCAP) said on Thursday the government had done a 'number juggling' and given almost no relief in income tax to the salaried individuals in the budget proposals for the fiscal year 2025-26.
In a press conference at the Karachi Press Club on Thursday, they pointed out that the tax authorities have targeted to collect Rs540 billion in income tax from employees working in regulated sectors in FY26, compared to Rs550 billion to be received in the outgoing FY25.
'The Rs10 billion relief to the entire working class nationwide is a so-called relief. This is number juggling,' said Bilal Farooq Rizvi, a member of the SCAP.
'We reject the government's claim of relief to the salaried class people (in the budget 2025-26),' he said.
According to the Federal Board of Revenue (FBR) reports, the income tax collection from salaried class people would be Rs550 billion in FY25, higher by Rs112 billion compared to FBR's set target for the outgoing year.
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According to the budget proposals for FY26, the tax rate for those earning Rs600,001 to Rs1.2 million has been slashed to 2.5% from 5%. Individuals earning between Rs1.2 million and Rs2.2 million will pay 11%, down from 15%, along with a drop in the fixed tax component from Rs30,000 to Rs6,000. For the Rs2.2 million to Rs3.2 million bracket, the rate has been reduced to 23% from 25%, and the fixed tax lowered from Rs180,000 to Rs116,000.
For those earning above Rs3.2 million annually, the rates remain unchanged. The 30% tax on incomes up to Rs4.1 million and 35% for those earning more continues. However, fixed taxes for the two slabs have been reduced to Rs346,000 and Rs616,000 from Rs430,000 and Rs700,000 respectively.
A slight relief has also been provided in the form of a 1 percentage point cut in the surcharge, down to 9% from 10% for individuals earning more than Rs10 million a year.
Adeel Khan, another SCAP member, claimed 'the income tax collection from salaried people has jumped 7 to 8-time in the past 3 to 4-year, increasing to Rs550 billion in FY25 compared to Rs70-80 billion a few years ago.'
Budget 2025-26: Pakistan govt offers tax relief to salaried class, but representatives unhappy
The government has targeted salaried class people to achieve the FBR tax collection target of Rs14.1 trillion in FY26, 'as it knows this is the soft target and they will not restore to violent protests and sit-ins and will neither block roads like political parties and shopkeepers do to get their demands accepted,' he added.
Khan said the government provided a meager relief of a maximum of Rs7,000 a month in income tax to the people appearing in middle income groups, reducing their monthly tax burden to merely 'Rs493,000 a month in FY26 from Rs500,000 a month paid in FY25'.
The employees working in the formal sectors were given a minimum relief of only Rs20,000 a month in income tax to the people falling in the middle income brackets. 'The provided so-called relief is no relief. This would make almost no difference in our lives,' he said.
SCAP member Iesha Fazal said, 'The provided relief is insignificant. This is tantamount to playing with the salaried class people. This is a joke. We reject it'.
They appealed to the authorities concerned to reduce the income tax rates by at least 2.5% for all the taxable slabs, including the individuals falling in the upper income brackets.
The government can still make changes in its proposals, as the Parliament is yet to give its official nod to the proposed budget and Finance Bill 2025.
'Pakistan salaried class paid 5 times more taxes than exporters, retailers in outgoing FY25'
Another SCAP member Rizwan Hussain said they would file a case in a court of law to get the due relief in income tax if the government approved the proposed tax rates as it was in the Finance Bills 2025.
He reiterated SCAP's old demand of removing the super tax completely, which the government reduced by 1% to 9% in the budget proposals for FY26.
Hussain also demanded relief in taxes on investment in mutual funds and similar investment products FY26.
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