LAHORE: Former federal minister and prominent businessman Gohar Ejaz has called on the government to provide further tax relief to Pakistan’s salaried class by introducing a simplified three-tier income tax structure in the Federal Budget 2026-27.
In a statement shared on social media, Ejaz urged policymakers and lawmakers to reconsider the proposed tax regime for salaried individuals before the budget receives final parliamentary approval.
Proposed Three-Slab Tax Structure
Ejaz proposed replacing the existing salary tax framework with three flat tax rates aimed at reducing the burden on middle-income earners.
Under his proposal:
- 5% tax on monthly income from Rs. 100,000 to Rs. 500,000
- 10% tax on monthly income from Rs. 500,000 to Rs. 1.5 million
- 20% tax on monthly income exceeding Rs. 1.5 million
According to him, a simpler and lower tax structure would provide meaningful financial relief to salaried households struggling with rising living costs.
Middle Class Facing Increasing Financial Pressure
Ejaz argued that salaried individuals, particularly those earning below Rs. 1.5 million per month, are facing increasing difficulty in managing essential household expenses.
He highlighted rising utility bills, education costs, healthcare expenses, and family expenditures as major factors affecting the disposable income of working professionals.
“The salaried class is the backbone of Pakistan’s economy,” he stated, emphasizing the need to strengthen the country’s middle-income segment.
Tax Relief Could Boost Economic Growth
The former minister maintained that reducing the tax burden on salaried workers would increase consumer spending and support broader economic activity.
According to Ejaz, higher disposable incomes would enable families to spend more on goods and services, stimulating business growth and economic expansion.
He further argued that increased consumption could ultimately generate higher government revenues through indirect taxes despite lower direct tax rates on salaries.
“Let the middle class be the engine of growth for Pakistan,” he said.
Comparison with Government’s Budget Proposal
The federal government has already proposed certain tax reductions for salaried taxpayers in the Budget 2026-27, including revised tax slabs and relief measures aimed at reducing the burden on lower and middle-income earners.
However, Ejaz believes his proposed framework would provide significantly greater relief, particularly for professionals and employees falling within the middle-income category.
To support his argument, he shared comparative charts illustrating the difference between the government’s proposed salary tax rates and his recommended flat-tax model.
Debate on Salaried Tax Relief Continues
Taxation of salaried individuals has emerged as one of the most widely discussed aspects of the Finance Bill 2026, with business leaders, tax professionals, and employee associations calling for further reductions in direct taxes.
Supporters of additional relief argue that salaried taxpayers remain among the most documented and compliant segments of the economy and therefore deserve greater consideration amid rising inflation and increasing living costs.
The government is expected to review various budget proposals and recommendations during parliamentary discussions before the Finance Bill 2026 is finalized.
