The Salaried Class Alliance of Pakistan (SCAP) has urged the government to ensure immediate relief for salaried individuals in the upcoming Finance Budget 2025-2026, citing disproportionately high tax burdens, rising inflation, and worsening economic conditions.
In a statement, the organization said salaried individuals—comprising government and private employees—are the only segment paying their due share of income tax in Pakistan, without any adjustment. Despite this, it said, they continued to bear the brunt of fiscal policies, including increased slab rates and a 10% surcharge on higher incomes that was introduced in the last budget.
“The middle class has been crushed. While inflation has doubled in the past three years, the minimum taxable income threshold remains stuck at Rs. 50,000 per month,” it said.
Warning that continued neglect of salaried individuals was contributing to a brain drain from the country, it cited reports that emigration of skilled and educated professionals had surged by 119% over the past year due to heavy taxation. Additionally, the SCAP noted, structural tax inequalities disproportionately impacted salaried individuals. It said salaried individuals were estimated to have contributed over Rs. 550 billion in taxes in the ongoing fiscal year, compared to Rs. 100 billion from exporters and retailers combined.
Similarly, it said, the agriculture sector contributes less than 1% in tax revenue despite comprising nearly 20% of GDP. Some landlords and privileged groups also enjoy vast exemptions, while wage earners face tax rates as high as 35% with additional surcharge of 10%.
Expressing concern over growing informality in the economy, the SCAP noted businesses were opting for paying salaries in cash to avoid high tax deductions, undermining documentation and long-term development.
Due to this situation, the SCAP has demanded the government raise the minimum taxable income threshold to Rs. 100,000/month; restore tax rates to their FY2022 levels; reduce government expenditures to support relief for higher tax rate taxpayers; abolish 10 percent surcharge on higher salaries; re-introduce tax credits; and expand the tax net.
The Alliance has emphasized that fair taxation is essential not only for economic justice but also for preventing further erosion of the country’s skilled workforce and promoting sustainable economic development.