Pakistan’s salaried workers are shouldering a heavy tax burden, paying Rs111 billion in income tax during the first quarter of FY 2024. This amount is a massive 1,550% more than what traders under the Tajir Dost Scheme paid.
Salaried individuals face a 39% effective tax rate, while traders have contributed only Rs1 million in direct taxes. Despite rising inflation and shrinking incomes, the government continues to increase taxes on salaried workers instead of widening the tax base.
Under pressure from the IMF, the government has not taken significant steps to ensure that traders and other sectors contribute their fair share of taxes. As a result, salaried employees are bearing most of the tax burden, while many traders manage to avoid even minimal taxes.
This imbalance places a growing financial strain on regular workers, who are already dealing with higher living costs. Meanwhile, the lack of tax contributions from other sectors only deepens the burden on those who are consistently taxed. Expanding the tax base to include more sectors could help relieve some of this pressure on the salaried class.
