The Salaried Class Alliance of Pakistan (SCAP) has called on the government to provide immediate relief to the salaried segment in the upcoming Finance Budget 2025-2026, citing disproportionately high tax burdens, rising inflation, and worsening economic conditions.
According to the Alliance, salaried individuals—comprising government and private employees including professionals in media, banking, education, and corporate sectors—are the only segment paying its due share of income tax, without any adjustment, in Pakistan. Despite this, they have borne the brunt of recent fiscal policies, including increased slab rates and a 10% surcharge on higher incomes, 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,” the SCAP stated.
The Alliance warned that continued neglect of this segment is contributing to the country’s worsening brain drain. Emigration of skilled and educated professionals reportedly surged by 119% over the past year, with heavy taxation cited as a key factor.
Moreover, the SCAP pointed to structural tax inequalities:
· In FY2025, salaried individuals are estimated to contribute more than Rs. 550 billion in taxes, compared to only Rs. 100 billion collectively paid by exporters and retailers.
· The agriculture sector, contributing nearly 20% of GDP, contributes less than 1% in tax revenue.
· Some landlords and privileged groups enjoy vast exemptions, while wage earners face tax rates as high as 35% with additional surcharge of 10%.
Additionally, the Alliance expressed concern over growing informality in the economy, where businesses opt to pay salaries in cash to avoid high tax deductions—undermining documentation and long-term development.
Demands by the Salaried Class Alliance Pakistan:
1. Raise the Minimum Taxable Income Threshold to Rs. 100,000 per month.
2. Restore Tax Rates to FY2022 levels.
3. Reduce Government Expenditure – to support relief for higher tax rate taxpayers
4. Abolish 10 percent Surcharge – It is nature of penalty being tax on time and in unfair to levy on compliant taxpayers
5. Re-introduce tax credits – Salaried class demands immediate reinstatement of tax credits
6. Widen the Tax Net by bringing untaxed sectors such as agriculture and informal businesses into the fold.
The Alliance 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.
