The salaried class in Pakistan is paying up to 9.4 times more tax than in neighboring India, revealed Pakistan Business Council (PBC), the country’s largest private sector advocacy platform on Thursday.
“For two countries with almost the same cost of living, income tax on salaried employees in Pakistan is up to 9.4 times that in India,” said the PBC in a post on social media platform X, while sharing data of income tax slabs in the two countries.
The development comes after the Pakistani government, running short of liquidity, imposed further taxes on the salaried class in the Budget 2024-25 presented on June 12.
In the Finance Bill 2024, the government has increased tax liability for all income groups that earn more than Rs50,000. Islamabad says it wants to generate an additional Rs70 billion in taxes from this group.
While the government did not touch the income tax exemption threshold – which still stood at Rs50,000 – liability increased across all other levels of salaries. For example, a person earning Rs100,000 a month will now pay Rs2,500 a month, up from the earlier level of Rs1,250 – showing 100% increase.
It also imposed a 10% surcharge on those whose total income go beyond Rs10 million during a fiscal year, on top of the higher rate of taxes.
On the other hand, the Indian government, in its bid to boost consumption, cut income tax rates for some citizens in its budget announcement this Tuesday.
The government revised a system introduced under which annual income between 0.3 million Indian rupees and 0.7 million Indian rupees will now attract a 5% tax rate as compared to income between 0.3 million Indian rupees and 0.6 million Indian rupees earlier.
The PBC, which has previously voiced against the Pakistani government latest budgetary measures, compared the taxable deductions between Pakistan and India in its post Thursday.
The PBC data showed that salaried persons earning up to Rs1.2 million a year will be liable to pay Rs30,000 in taxes in Pakistan, as compared to Rs3,018 in India, i.e. a difference of Rs26,982 or 8.9 times.
Similarly, salaried persons earning Rs1.8 million a year will pay Rs120,000 in taxes in Pakistan, as compared to only Rs12,027 in India, showing a 9 times increase.
American Dollar Exchange Rate