ISLAMABAD:
The Salaried Class Alliance of Pakistan (SCAP) has called on the federal government to provide urgent relief to wage earners in the Finance Budget 2025–26, warning that current tax policies are driving skilled professionals out of the country and widening inequality in the tax system.
In a statement issued Thursday, SCAP said that salaried individuals—including professionals from the media, education, banking, and corporate sectors—are the only segment consistently paying their due share of income tax. However, they continue to bear a disproportionately heavy burden under recent fiscal policies, without any adjustment mechanisms in place.
The Alliance criticized last year’s introduction of increased tax slab rates and an additional 10% surcharge on higher income brackets, calling these measures punitive for compliant taxpayers. Despite a sharp increase in inflation over the last three years, the minimum taxable income threshold remains unchanged at Rs50,000 per month, SCAP noted.
The group linked this fiscal pressure to a rising trend in emigration, claiming the outflow of educated and skilled workers surged by 119% over the past year. Heavy taxation, they argued, is a key factor pushing professionals abroad.
SCAP also drew attention to structural imbalances in the tax regime. For FY2025, salaried individuals are expected to contribute over Rs550 billion in income tax, compared to Rs100 billion collectively from exporters and retailers. Meanwhile, the agriculture sector, which constitutes around 20% of the GDP, contributes less than 1% to total tax revenues.
The Alliance expressed concern over the rise of informality in employment, with more businesses reportedly paying salaries in cash to avoid tax deductions. This, SCAP warned, is undermining the country’s documentation drive and long-term development.
Among its key demands, SCAP called for raising the minimum taxable income threshold to Rs100,000 per month, restoring tax rates to FY2022 levels, abolishing the 10% income surcharge, and reinstating tax credits for salaried workers. The group also urged the government to reduce public expenditure and expand the tax base by including untaxed sectors such as agriculture and informal businesses.
Stressing the need for a fair and inclusive tax policy, SCAP said protecting Pakistan’s middle class is essential not only for economic justice but also for sustaining national development and retaining human capital.
