In a recent statement, Federal Minister for Finance and Revenue, Muhammad Aurangzeb, addressed concerns over the increased tax burden on the salaried group following the announcement of the Budget 2024-25. Aurangzeb assured that the government is committed to finding ways to protect the salaried class and minimize the impact of new tax measures.
Speaking to Geo News, the finance minister emphasized the government’s efforts to shield the salaried class from excessive taxation, stating, “We made a lot of effort to protect them.” He acknowledged the concerns raised regarding the tax brackets, super tax, and other levies, and highlighted the government’s intention to safeguard individuals earning less than Rs600,000 annually by maintaining their exemption from income tax.
Aurangzeb further recognized the need to review the tax relief options for different income slabs, especially considering the government’s target to significantly increase tax revenue. While outlining the plan to generate additional revenue through the removal of exemptions and imposition of new taxes, he stated, “We are reviewing how much relief we can provide to the tax slabs.”
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Addressing the impact of the new tax measures on the salaried class, the finance minister disclosed that the total effect amounts to approximately Rs70 billion out of the targeted Rs1.5-1.6 trillion additional revenue. He also clarified that the government aims to increase its overall tax revenue from Rs9.4 trillion to Rs12.9 trillion, with a focus on generating Rs1.5 trillion through additional revenue measures.
Following the announcement of the Budget 2024-25, there has been widespread criticism from lawmakers and various political parties regarding the heavier tax burden on the salaried class. Lawmakers expressed concerns over the significant tax hikes for individuals earning more than Rs50,000 per month, emphasizing the potential repercussions on the retention of talent within the country and urging for revisions in the budget to alleviate the tax burden on the masses.
The government’s approach to taxation, particularly its impact on the salaried group, has been a subject of debate, with calls for a more balanced taxation policy that also targets the informal sectors. As the government continues to seek ways to enhance tax-to-GDP ratio, it faces ongoing scrutiny and pressure to address the taxation dynamics for both formal and informal sectors in the country.
