The Salaried Class Alliance of Pakistan (SCAP) has appealed to the federal government to raise the income tax exemption threshold and revise existing tax policies in the upcoming budget. In its official statement, the Alliance stressed the urgent need for financial relief for salaried professionals who, it claims, are bearing an unfair share of the national tax burden.
Representing workers from sectors such as education, banking, media, and corporate industries, SCAP stated that salaried employees are the most tax-compliant group in the country, yet face increasing financial pressures due to inflation and aggressive fiscal measures.
Disproportionate Tax Burden on the Middle Class
The group highlighted that recent budgets have raised tax slab rates and introduced a 10 percent surcharge on high-income earners without adjusting the minimum taxable income, which remains unchanged at Rs. 50,000 per month. According to SCAP, this policy stance has placed immense strain on middle-class households already grappling with rising prices and stagnant wages.
“The middle class has been crushed. While inflation has more than doubled over three years, the tax-free income limit remains frozen. This is unjust,” said the statement.
SCAP also warned that such fiscal policies are accelerating the brain drain from Pakistan. The emigration of skilled professionals increased by 119 percent in the past year alone, the Alliance noted, with many citing heavy taxation as a primary reason for leaving.
The Alliance criticized the stark imbalances in the national tax structure, pointing out that salaried individuals are expected to contribute over Rs. 550 billion in income tax for FY2025. In contrast, exporters and retailers combined contribute around Rs. 100 billion.
Moreover, sectors like agriculture—which account for about 20 percent of the GDP—contribute less than 1 percent in taxes. SCAP argued that such disparities not only undermine economic equity but also discourage transparency and documentation, as many companies are reportedly shifting to cash-based salary payments to evade tax obligations.
SCAP’s Core Demands to the Government
SCAP presented a six-point agenda for tax reform, including:
- Increasing the minimum taxable income limit to Rs. 100,000 per month
- Rolling back tax rates to FY2022 levels
- Cutting down government expenditure to enable relief for higher taxpayers
- Removing the 10 percent income surcharge, which they termed “punitive and unfair”
- Reintroducing tax credits to ease burdens on compliant taxpayers
- Expanding the tax base to include agriculture and the informal economy
The Alliance emphasized that sustainable economic growth is only possible through equitable taxation and fiscal justice. SCAP urged the government to respond to these demands to protect the salaried class and prevent further loss of the country’s skilled workforce.
