Subtitle: Alliance calls for revised tax slabs and increased exemptions to ease the financial burden on the salaried class.
Key Takeaways:
- Salaried Class Alliance Pakistan urges the government to revise tax slabs and increase exemption limits in the upcoming FY26 budget.
- The alliance highlights the disproportionate tax burden on salaried individuals, with collections surging from Rs 76 billion in 2019 to an expected Rs 570 billion in 2025.
- Recommendations include raising the annual exemption threshold to Rs 1,200,000 and reintroducing deductions to alleviate financial strain.
Islamabad, Pakistan – April 14, 2025 – The Salaried Class Alliance Pakistan is appealing to the government for tax relief in the upcoming fiscal year 2026 budget, citing the increasing financial strain on salaried individuals due to high inflation and stagnant wages. In a formal letter addressed to Finance Minister Senator Muhammad Aurangzeb, the alliance requested a revision of tax slabs, an increase in exemption limits, and the reintroduction of key deductions.
These include revising tax slabs to better reflect the current cost of living, increasing the medical allowance exemption, introducing commuting-related allowances, and raising the annual exemption threshold to Rs 1,200,000.
The alliance emphasized that the salaried class is bearing a disproportionate share of the tax burden. Tax collections from this segment have risen sharply in recent years, from Rs 76 billion in 2019 to an anticipated Rs 570 billion in 2025. While acknowledging the government’s revenue collection efforts, the alliance pointed out that many salaried individuals are struggling to maintain their living standards amid rising costs.
Furthermore, the alliance noted that the exemption threshold has remained unchanged at Rs 600,000 for several years, despite significant inflation.
The letter also highlighted the removal of tax credits and deductions under the Finance Act 2022, including those for investments and health insurance, as well as the impact of a 10% surcharge introduced in 2024. Furthermore, the alliance noted that the exemption threshold has remained unchanged at Rs 600,000 for several years, despite significant inflation.
To address these concerns, the Salaried Class Alliance has proposed several measures. These include revising tax slabs to better reflect the current cost of living, increasing the medical allowance exemption, introducing commuting-related allowances, and raising the annual exemption threshold to Rs 1,200,000. The alliance hopes that these reforms will be considered during the finalization of the federal budget for 2025-2026, providing much-needed relief to the salaried class while ensuring sustainable revenue growth for the country.
