Budget 2024-25: Government Intent On Squeezing The Salaried Class is not acceptable

Certainly! When analyzing the budget for 2024-25 and addressing the perspective that it unfairly squeezes the salaried class, it is essential to present a balanced view with supporting facts. Here's an argument outlining why such a budget may not be acceptable:

1. Increased Tax Burden: If the budget imposes higher taxes on the salaried class without providing corresponding benefits, it can be seen as inequitable. Salaried employees already contribute significantly to the tax pool, and further increases can diminish their disposable income, affecting their standard of living.
2. Inflation and Cost of Living: The cost of living continues to rise due to inflation. Additional tax burdens exacerbate the financial strain on the salaried class, making it harder for them to cope with everyday expenses such as housing, education, and healthcare.
3. Lack of Proportional Benefits: The budget should ensure that the increased tax revenue from the salaried class is proportionally spent on public services that benefit them, such as improved infrastructure, healthcare, and education. If these benefits are not apparent, the higher tax rates seem unjustified.
4. Disproportionate Impact on Middle-Income Groups: The salaried class often includes a significant portion of the middle-income population. Unlike high-income earners, middle-income earners have limited disposable income and savings. Additional financial burdens can lead to decreased savings and reduced ability to invest in the future.
5. Economic Growth and Consumer Spending: The salaried class is a crucial driver of consumer spending, which is vital for economic growth. Reducing their disposable income through higher taxes can lead to lower consumer spending, which can, in turn, slow down economic growth and impact overall market dynamics.
6. Workforce Motivation and Productivity: A perceived unfair tax burden can demotivate the workforce. Feeling overtaxed without commensurate benefits can reduce morale and productivity among salaried employees, potentially impacting overall economic productivity.
7. Comparative Taxation: If the tax rates on the salaried class are significantly higher than other groups, such as business owners or investors, it creates a sense of inequality. A fair tax system should ensure that all groups contribute equitably to the national revenue.
8. Fiscal Responsibility and Efficiency: The government should also focus on fiscal responsibility by reducing wasteful expenditure and improving the efficiency of public spending. This ensures that the tax revenue is utilized effectively, providing better value to taxpayers.
9. Alternative Revenue Sources: The government can explore alternative revenue sources to avoid over-reliance on the salaried class for tax income. This can include broadening the tax base, implementing more progressive tax policies, and reducing tax evasion in other sectors.

By addressing these points, it becomes clear that an unfair financial burden on the salaried class is not a sustainable or just approach for the long-term economic health and social stability of the country. The budget should aim for a balanced approach that ensures equitable tax distribution and provides tangible benefits to all sections of society.

Did You Know?

In just 11 months, salaried individuals in Pakistan paid Rs. 326 billion in income tax, compared to only Rs. 85.5 billion paid by the richest exporters. This disparity highlights a significant issue with the tax system, which is uncommon in many other parts of the world.

Key Concerns in the 2024-25 Budget

The new budget for 2024-25 raises serious concerns for Pakistan's salaried class. Despite their substantial contribution to the economy, they are subjected to regressive taxes. This is especially unfair given the current high inflation rates, which make it even harder for these individuals to manage their finances.

1. Unfair Taxation: The IMF's proposed tax measures include a 35% income tax rate on salaries over Rs. 333,000 per month. This disproportionately affects the middle and lower classes, further squeezing their already tight budgets.

2. High Inflation: With inflation rates soaring, these tax policies are unsustainable and unfair, particularly for those supporting families. High living costs and heavy tax burdens make it difficult for salaried individuals to maintain their standard of living.

3. Lack of Relief: The new budget continues to favor the wealthy, offering them tax-free perks and benefits, while the salaried class struggles under heavy tax burdens. This imbalance needs to be addressed to ensure a fairer distribution of tax responsibilities.

Why We Must Act

Fair Wages: Salaried individuals deserve fair compensation for their hard work. It's crucial to ensure that their wages reflect their contributions and the economic realities they face.

Support for Families: Tax policies should support, not hinder, those who are raising the next generation. Families need financial stability to thrive, and current tax measures make this difficult.

Equitable Taxation: It's time to shift the tax burden to the ultra-rich, ensuring they pay their fair share. An equitable tax system is essential for social and economic justice.

Take Action

Let’s raise our voices and advocate for fair wages and equitable taxation. The salaried class deserves respect and a living wage. Together, we can push for policies that support all citizens, not just the privileged few.