The working class has launched a campaign against the high taxation of workers under the 2023 Finance Law.
Under these circumstances, the salary class is developing a national movement under the slogan, “Save the salary class.”
In a letter to Finance Minister Ishak Dar, he expressed concern over the recently introduced additional direct tax measures for workers. Specifically, the letter deals with a 2.5 percent tax increase and changes to the income table.
These changes will have a significant impact on the economic burden on workers, the letter said. The report said, “The above increases exceed the exorbitant tax burden already passed on to the working class through the 2023 Finance Act, which not only significantly increased tax rates but also eliminated several tax credits. is something,” he said.
The working class is already facing the harsh realities of high inflation, rising GST, higher oil taxes, rising energy costs and limited job opportunities. The proposed tax hikes and changes to income limits would significantly reduce net disposable income and place additional burdens on those already struggling to make ends meet.
Therefore, the proposed changes will have serious implications for workers’ organizations.
“Furthermore, the significant depreciation of the Pakistani rupee against major currencies has resulted in a significant (more than 50%) reduction in the purchasing power of the working class,” the letter said. It is becoming increasingly difficult for them to meet their daily expenses and manage their household finances. ”
“It is important to note that private sector workers, who make up the majority of the labor force, have not seen wage increases as inflation has increased,” he added. By contrast, wages increased for civil servants and some sectors. As a result, income disparities between different sectors of society have widened further. ”
Unlike companies in the corporate, industrial, commercial, and service sectors, employees cannot claim expenses against their income, further limiting their ability to manage their finances effectively.
Notably, the government’s removal of tax protection measures for investments in the previous budget increased the fiscal burden. In addition, major billable pay grade expenses were also removed in previous budgets.
As a result, in a short period of time, the tax burden on the working class increased significantly, leading to serious financial difficulties. The working class has the highest effective tax rate of any income source.
The working class has urged governments to look for other ways to generate tax revenue, such as focusing on the wholesale and retail sector, which accounts for 18% of GDP but bears a disproportionately low tax burden of just 1%. asking the government. Other sectors also contribute poorly to tax revenue relative to their share of GDP.
“Incorporating these layers of the economy into the tax system is legally questionable, but stifling sectors of the economy that already pay taxes is sheer unfair to only some sectors.” Introducing fair tax measures across the board would ensure a more equitable distribution of taxes. burden,” the statement said. “The salary class is made up of law-abiding citizens for whom integrity is a core value. They are not involved in illegal income generation. Fiscal problems have been exacerbated by persistently high inflation, making it increasingly difficult to meet basic needs.