Salaried Class Demands Relief Budget 2025-26 Amid Soaring Tax
SLAMABAD – SCAP is urging the government to give tax relief to salaried people, since they are carrying a greater load than others.
SCAP consists of professionals covering sectors such as government, education, journalism, banking and private employment, who state they are overtaxed when inflation, wage stagnation and economic trouble already exist.
Salaried Class: The Backbone of Tax Compliance
ICompared to many other sectors in Pakistan, people who get salaries spend more time on tax compliance. With income tax deducted from your paycheck, evasion is almost always caught. The group maintains that they have continually been singled out by each government’s fiscal policy.
SCAP pointed out in its official statement that salaried people pay all their income tax in full, unlike many others and this has put an unequal financial burden on them recently.
The middle class is no more. With inflation increased by a factor of two since 2019, the minimum taxable income amount has not changed and still sits at Rs. 50,000 a month, the Alliance pointed out.
Massive Increase in Tax Collection from Salaried Segment
SCAP reports that the taxes on salaried workers are now ten times more than they used to be, going from Rs 76 billion in 2019 to an expected Rs 570 billion this year. The government sees this as increased revenue, yet SCAP insists it happened because the government took funds from some of the most financially open businesses.
It discover that producers of goods and services offer the government much higher contributions than do businessmen and farmers who are generally not tax at all.
10% Surcharge Adds to the Burden
Things got worse in 2024 when the Finance Act brought in a 10% surcharge for those with higher incomes. This measure was describe by SCAP as a punishment, even though the individuals are already within the range of income taxes.
Because of higher surcharge, greater slab rates and fewer tax breaks for mutual funds, life and health insurance, Pakistan’s middle and upper-middle class are facing extra financial pressures.
Inflation, Stagnant Wages, and Unfair Thresholds
SCAP is also concerned that inflation in Pakistan has gone up a lot over the last three years, yet the same Rs 50,000/month limit for minimum tax remains in place. Still, there are nations that change their tax brackets based on rises in living costs and inflation.
Consequently, low-earning wage workers take every cent they have home while leaving the self-employed in the informal sector to pay nothing in taxes.
Someone who earns Rs 50,000 while employed has tax cut out, while a paan wala does not face such deductions… It’s not that we don’t want to pay taxes, but we think others should do so, too,” said Ahmed Khan from SCAP.
Key Demands by SCAP in Budget 2025-26
In response to Pakistan’s salaried workers’ concerns, the SCAP has come up with a detailed proposal to even out the tax rules.
1. Raise the Minimum Taxable Income Threshold
SCAP urges that the monthly tax exemption limit raise from Rs50,000 to Rs100,000 to match ongoing inflation and living expenses.
2. Reintroduce Tax Incentives
Allocated to mutual funds, insurance and stock shares, the alliance believes these benefits ought to be restored after the Finance Act 2022 removed them.
3. Remove the Additional 10% Surcharge
The Finance Act recently created a 10% income surcharge on taxpayers which affects those who work within the formal economy without reason.
4. Expand the Tax Net
SCAP advisors recommended that the government make more retailers, agriculturalists and landlords pay taxes. Tax obedience should apply equally to all people.
5. Adjust Tax Slabs with Economic Reality
Alliance members highlighted that tax rates should fit with international standards and be built based on the cost of living, instead of filling more tax money from a limited number of people.
Brain Drain: Professionals Eyeing Opportunities Abroad
Many skilled workers are choosing to leave their countries because they face growing taxes and unchanged incomes. SCAP points out that Pakistan’s talented engineers, doctors, IT professionals and experts in finance could go abroad where working benefits are greater and the economy is stronger.
SCAP’s Appeal to Government and Judiciary
The Alliance urged Senator Muhammad Aurangzeb, Finance Minister, to take action immediately in their written appeal. The petition was sent to the Supreme Court with a request for it to note the case saying SCAP considers it as a constitutional and economic injustice.
Ahmed Khan stood out among SCAP members by making this bold statement:
You won’t meet salaried individuals in the congress or committees. They were all from zamindaar backgrounds. If there is no one with such experience in Parliament, how can the matter be discussed?”
His words reveal a gap between policies and taxpayers which SCAP is working to overcome through additional advocacy.
A Wake-Up Call for Policy Makers
They are not expecting anyone to give them handouts. They are asking for fair treatment, equal rights and taxes that do not target them only because it’s easier to do so.
During economic crises, it is better to introduce progress than to push for harsher policies.
Budget 2025-26 presents an opportunity for the government to:
ecognize the efforts of people who work for a salary.
Put measures in place so that people who can afford to pay more taxes do so.
Restore the relationship of trust between taxpayers and state officials.
Conclusion
As the country gets set to announce its budget, the opinions of its salaried professionals are being heard more and more. The Salaried Class Alliance of Pakistan has shown that the taxation policy in the country is not balanced. What they request is practical and important for the country to achieve a fair and lasting economic future.
The government should be paying attention to all working Pakistanis, not just the elite or those who avoid paying taxes.
