The salaried class paid 1550 percent more tax than the merchants

In Pakistan, the most affected by inflation, the salaried class has paid a total of 111 billion rupees in income tax in just three months of the current financial year.

That is 1,550 percent more than the taxes paid by businessmen and 56 percent more than the previous financial year.

In June this year, instead of reducing expenditure and effectively increasing the tax net, the government increased the tax burden on salaried individuals. Income tax of 28 billion rupees has been paid by all federal and provincial government employees whose salaries have increased by 20 to 25 percent.

The remaining Rs 83 billion in income tax was paid by private sector employees, the majority of whom do not even get an annual increment, compared to the FBR collecting only Rs 6.7 billion from businessmen.

The richest 5% of the country is not paying taxes, Chairman FBR

In the budget, the government had increased the rate of withholding tax on supplies from 2.5 to 150 percent, hoping to bring traders into the tax net, but traders paid barely Rs 10 lakh in tax directly to the FBR. 0.001% of the target given by MF.

For the July-September quarter of the current financial year, the amount of tax revenue collected by FBR under the Trader-Friendly Scheme was Rs.10 billion. Instead of giving any relief to salaried and non-salaried individuals, the government increased the income tax rate to around 39% for salaried individuals, 44% for associations and 50% for non-salaried individuals.

Which the current chairman FBR Rashid Langriyal himself termed as unfair. The government had also imposed a 10% surcharge on the income tax paid by a person on an annual income of Rs 10 million.

The FBR had told the federal cabinet that after the increase in the tax rate in the budget, the additional tax contribution from the salaried class in the current financial year 2024-25 will be Rs 85 billion, but the results of the first three months would show that FBR has reduced only additional taxes of salaried class. FBR has collected additional Rs 40 billion in just three months.