Pakistan salaried class rejects govt's claim of giving relief in income tax
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.
Numbers speak: Sindh agriculturalists spend more on vehicle registration, pay less in income tax
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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
a day ago
- Business Recorder
Biometric verification of registered persons: LTBA urges FBR, Nadra to bring in secure mobile app
ISLAMABAD: The Federal Board of Revenue (FBR) and the National Database and Registration Authority (Nadra) should jointly implement a secure mobile application for biometric verification of sales tax registered persons. According to a letter of the Lahore Tax Bar Association (LTBA) to the FBR Chairman, the association highlighted major challenges faced by certain sales taxpayers under the current biometric verification system and proposed a digital solution aligned with FBR's commitment to facilitation and innovation. Presently, biometric verification for sales tax registration and annually bio metric which required in terms of SRO 350(1)/2024 is conducted exclusively through Nadra's physical infrastructure. While this may suffice for most residents, it poses considerable challenges for the following categories of taxpayers: (I); Individuals temporarily residing or travelling abroad. (2); Taxpayers located in remote or underdeveloped areas. (3); Elderly or physically challenged individuals who cannot easily access the Nadra facilities. Due to the unavailability of a remote verification mechanism, these taxpayers are unable to complete their sales tax registration and annually biometric which required in tarns of SRO 350(1)/2024 dated 07.03.2025, despite their willingness to comply with legal requirements. This creates unnecessary delays, hampers business operations, filing of sales tax returns and discourages potential entrants into the tax system. Key challenges included no Remote Option for Overseas Taxpayers and delays in Registration Activation and filing of sales tax returns. He LTBA proposed the FBR should consider in coordination with Nadra, the development and deployment of a secure mobile application for biometric verification. This solution may include facial recognition or fingerprint scanning wing smartphone technology and secure integration between the FBR and the Nadra. The expected benefits included enhanced taxpayer's facilitation particularly for overseas Pakistanis and remote areas residents, improved compliance rate with quicker registration and fewer delays; expanded lax base and alignment with FBR's digital transformation and automation goals. The association is confident that this initiative would greatly enhance the accessibility, efficiency, compliance and Inclusivity of FBR's taxpayers' registration system and ease filing of sales tax returns and enhance the revenue collection, it added. Copyright Business Recorder, 2025
Express Tribune
2 days ago
- Express Tribune
US trip likely for Roosevelt advisers
The government may send a delegation from the Privatisation Commission to the United States to search for consultants to advance the transaction of managing the high-value Roosevelt Hotel, New York, in partnership with the private sector. The Privatisation Commission has submitted a summary for Prime Minister Shehbaz Sharif's approval for the visit of the Advisor to the Prime Minister on Privatisation and the Secretary Privatisation from August 20th to 24th, according to sources. The government will spend approximately Rs3 million on the two-person delegation's visit to the US. It is unusual for a government team to travel overseas to attract financial advisors for privatisation transactions. While roadshows have been held in the past, they were primarily for engaging with potential buyers of government entities or assets, not for securing advisors. The government has already advertised in local and foreign press, seeking expressions of interest from new financial advisors by September 2nd, following the resignation of the previous advisor due to a conflict of interest. Pakistan had initially hired an American real estate management firm for the privatisation of the Roosevelt Hotel at a total cost of about Rs2.2 billion. It had already paid Rs1.1 billion to the firm, which abandoned the transaction last month citing a "conflict of interest" and offered to return the payments. Jones Lang LaSalle (JLL) had been selected to develop a transaction structure for the hotel's privatisation. The Roosevelt Hotel, located in the heart of a global commercial and tourism hub, is currently owned by the financially struggling Pakistan International Airlines (PIA). PIA owns the hotel through PIA-Investment Limited, which holds its stakes via a subsidiary registered in the British Virgin Islands. Based on the work done by the previous financial advisor, the government has already approved the transaction structure for the Roosevelt Hotel, New York. Of the three options evaluated by the financial advisor — outright sale, joint venture with multiple options, and long-term lease — the joint venture model with multiple options was approved. Last month, the government stated that the joint venture option aims to maximise long-term value for the country while ensuring flexibility, multiple exit opportunities, and minimising future fiscal exposure. Following JLL's withdrawal, there may be doubts among prospective financial advisors about Pakistan's commitment to the transaction, said Muhammad Ali, Advisor to the Prime Minister on Privatisation, explaining the rationale behind the US visit. He said that meetings with at least six prospective financial advisors have already been scheduled for August 21st to 22nd, and the visit is result-oriented. He added that there is a need to reassure potential advisors that most of the groundwork has been completed and the government has finalised the joint venture option. The government has arranged meetings with CitiBank, Coldwell Banker Richard Ellis (CBRE) — a real estate service provider — Savills, Grey Steel, Ankura, and Cushman & Wakefield. Two of these firms had participated in the previous round of hiring for the financial advisor role. According to the financial advisor's report on the transaction structure, Pakistan will not need to contribute additional funds for the joint venture, as its share will be in the form of the hotel's land value. "Based on pre-marketing, due diligence, and analysis of the options, the joint venture structure nets the highest value for the government of Pakistan," the advisor stated in its report. The land value will be calculated based on its full potential, including the 32-storey building. The development partner will make two initial deposits. "This option carries the highest risk but also offers the highest net proceeds to Pakistan," the adviser noted in the report submitted last year. ZTBL transaction On Friday, the Privatisation Commission signed the Financial Advisory Services Agreement for the privatisation of Zarai Taraqiati Bank Limited (ZTBL). It has engaged a consortium led by Next Capital Limited. Other members of the consortium include Ijaz Ahmed & Associates, Baker Tilly Mehmood Idrees Qamar, Executives Network International, Bridge Public Relations, Savills Pakistan (Pvt) Limited, and Prima Global Consulting (Pvt) Limited. Post-privatisation, ZTBL, with its nationwide network of 501 branches, will be better positioned to provide more accessible credit to small farmers and rural communities. It will also introduce modern banking technologies and digital solutions for agricultural financing, according to the Privatisation Commission. However, concerns have been raised that after ZTBL's privatisation, there may no longer be a financial institution fully dedicated to meeting the needs of small farmers. Most major banks do not cater to small farmers, and there are doubts about their claims of providing loans to this sector. Sources also indicated that the central bank does not accurately reflect real lending to farmers, as loans to agro-based industries are also classified as agricultural loans. Under the agreement, the financial advisor will conduct sell-side due diligence, carry out market sounding, engage with potential investors, structure the transaction, market it to investors, and assist the Privatisation Commission in ensuring a transparent bidding process, as per the press statement.
Business Recorder
2 days ago
- Business Recorder
Urgent intervention sought to resolve Customs clearance delay
LAHORE: Customs agents are perturbed over undue delay in the clearance process of their Baggage Declarations, seeking immediate intervention of relevant authorities to resolve the issue. According to a complaint, the BD was filed on July 28, 2025, and the physical examination of the shipment was conducted on August 1, 2025. However, as of August 8, 2025, the BD status remains 'Assessment in Process,' despite repeated follow-ups with concerned officers. Such delays, according to sources, have resulted in substantial Shipping Line Detention and Port Demurrage Charges, amounting to approximately Rs 50,000 per day, which is increasing daily. The trading firm attributes the financial burden entirely to administrative delay, causing severe hardship to the importer. They said there is an urgent need to complete the assessment process and clear the shipment without further delay, determine the cause and responsibility for the delay and take corrective action to prevent recurrence and provide relief to the importer for the financial losses incurred due to the unjustified delay. They have further added that importers are facing such hassle despite the claim of the Federal Board of Revenue (FBR) of introducing faceless system. Copyright Business Recorder, 2025
