Concerns Over Finance Bill 2025-26: A Call to Action by Salaried Class Alliance
In a recent press conference at the Karachi Press Club, the Salaried Class Alliance Pakistan raised alarm bells over the proposed Finance Bill for 2025-26. Members including Bilal Farooq Alvi, Rizwan Hussain, Adeel Khan, and Lesha Fazal expressed that this bill is detrimental to one of the country’s most tax-compliant groups—the salaried individuals.
It’s striking to note that the tax contributions from salaried individuals have skyrocketed from Rs76.44 billion in FY2018-19 to an astonishing Rs550 billion in FY2024-25, marking an increase of nearly 719%. This staggering rise is attributed to inflation and recent policy changes rather than real income growth, highlighting a troubling disconnect between earning potential and taxation.
One major focal point of concern is the taxation of pension funds. Many salaried professionals view their pensions as hard-earned savings meant for retirement security. Yet, this proposed bill seems to threaten that security by imposing increased taxes on their returns. Additionally, heightened taxes on profits from banks and mutual funds further burden those trying to grow their savings.
Perhaps the most troubling aspect is the ongoing 10% surcharge on high-income earners, while sectors that operate outside formal taxation continue to go untaxed. This raises serious questions about fairness and equality in the tax system.
The alliance members made several key recommendations aimed at alleviating some of these burdens. They are calling on the government to adjust the tax-free salary slab to Rs100,000 per month. Restoring previous slab rates could significantly ease the financial strain on middle-income earners. They also proposed reducing the top tax slab to 32.5% and the second-highest to 27.5%, ensuring the lowest slab remains at 1%. These adjustments could create a more equitable tax system where everyone pays their fair share.
Moreover, the demand for reinstating tax credits for insurance, education, and investments cannot be overlooked. These incentives are crucial for encouraging savings and investments, which ultimately contribute to the nation’s economy.
With these pressing concerns, it’s essential for salaried individuals to voice their opinions and urge the government to reconsider its approach. Equal treatment of all taxpayers and a fair taxation system should not just be an ideal, but a fundamental reality. It’s time to advocate for a tax policy that truly reflects the contributions of all citizens, ensuring a balanced and just financial landscape for everyone.
