IN the recently concluded fiscal year, Pakistan’s salaried class contributed an impressive Rs545 billion in income tax to the national treasury.
This figure is not just a number—it is a reflection of the heavy burden placed on a segment of society that already struggles with price hike, high utility costs and economic instability. When compared with other sectors, this number is even more startling. Exporters, who benefit from dollar earnings and various government incentives, paid only Rs180 billion in taxes. Retailers, many of whom often operate outside the formal economy, contributed just Rs62 billion under specific provisions of the Income Tax Ordinance.
This means that the salaried class alone has paid more than double the total amount paid by exporters and retailers combined. In fact, they paid three times more than exporters and nearly eight times more than retailers. These figures clearly show that our taxation system is not only unbalanced but also unfair. The salaried class, unlike other groups, cannot avoid taxes. Their income tax is deducted directly from their monthly pay, making it the most transparent and enforced form of taxation. They have no scope for underreporting income, no space for hiding profits and no option to delay or avoid payments. Meanwhile, many retailers and exporters, despite having high earnings, contribute far less due to weak enforcement or loopholes in the system. While it is true that the government has provided some relief to the salaried class in the current fiscal year’s budget, it is clear that much more needs to be done. Real reform means not just offering small adjustments but fixing the wider structure of taxation in the country. All income groups—whether they are businessmen, exporters or industrialists—must be taxed fairly based on their actual income. There should be no exceptions and those who engage in tax evasion must face strict legal consequences. Furthermore, it is equally important to make the tax filing process simpler for honest taxpayers. For many salaried individuals, especially those who have no other source of income, the current tax return system is confusing and needlessly complex. Many are forced to hire professionals just to fill out their return forms, which increases their financial burden even further. For such employees, the government should reintroduce a simplified one-page tax return form, similar to the one implemented during Dr Mehboob-ul Haq’s tenure as Finance Minister. This form should require only basic information about the individual’s salary and the tax already deducted at source, easing the process for honest taxpayers and reducing their financial and administrative burden.
