The Heavy Tax Burden on the Salaried

In recent times, the salaried class in Pakistan has found itself caught in a relentless cycle of taxation, grappling with not just income tax but an array of levies that impact nearly every aspect of their lives. The surge in taxes, coupled with rampant inflation, has left the salaried population questioning the government's intentions. Are they, quite literally, killing the salaried? This article delves into the multifaceted challenges faced by the salaried class in Pakistan's taxing economic landscape.

The Overwhelming Taxation Landscape:

For the salaried individuals in Pakistan, it's not just the income tax that takes a chunk of their hard-earned money. The sales tax, hovering around 16-18% on most goods, adds to their financial woes. Petrol bears an additional 15% tax, and there are levies on mobile usage, gas, and electricity consumption. Even road and vehicle usage come with separate taxes. As a result, many salaried individuals feel that more than half of their income is siphoned off by the government in various forms of taxation.

Inflation's Impact on Household Budgets:

The recent hikes in taxation coincide with a period of rampant inflation, hitting the salaried class hard. With a staggering 35% inflation rate, households are under tremendous pressure to stretch their budgets and keep their financial ships afloat. The prices of essential commodities, utilities, and services have witnessed significant spikes, compounding the challenges faced by the salaried.

Unfairness in the Tax/Expenditure System:

Beyond the direct impact of taxation, three critical aspects underscore the unfairness in Pakistan's tax and expenditure system.

1. There is a lack of tangible returns for taxpayers. Most salaried individuals resort to private schools, avoid public hospitals, and pay separately for essential services, leaving them feeling doubly cheated by a predatory state.
2. Many powerful and wealthy sectors remain outside the tax net. Agriculture, trading, and real estate, among others, enjoy substantial subsidies while avoiding their fair share of taxation. This contributes to a sense of injustice among the taxed, adding insult to injury.
3. The inefficient use of tax money further erodes the satisfaction of contributing to the system. Reports indicate that significant sums are channeled into subsidies and transfers for the affluent. Government expenditure on non-productive areas and excessive defense spending exacerbates the frustration among taxpayers who see vital issues like education, malnutrition, and safe drinking water remain unaddressed.

The current taxation rates, particularly for those within the tax net, are perceived as cruel, especially when compared to the glaring loopholes that allow many others to avoid taxes and benefit from subsidies. The government's inability to extend the tax net, reduce transfers to the rich, and rationalize expenditure threatens to corrode state legitimacy.

If the salaried are to bear such heavy taxation, the least the government owes its citizens is efficient and equitable spending. It is high time for a comprehensive overhaul of Pakistan's taxation system, ensuring fairness, transparency, and accountability. Failure to address these issues not only deepens the economic divide but also undermines the legitimacy of the state in the eyes of its taxed citizens.

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