Former caretaker minister for Commerce and Industries Dr Gohar Ejaz has urged the government to provide tax relief to the salaried class, and lower the rate to a maximum of 15%.
Taking to social media platform X on Friday, the industrialist raised concerns over measures taken by the government in the budget for fiscal year 2024-25.
“In this budget Rs13 trillion is being targeted to be collected as taxes from all of us against collection of Rs9.3 trillion (in the previous fiscal year). Out of projected tax, Rs7.5 trillion will go to provinces as per the 18th Amendment,” said Gohar.
“Sadly, the country will be paying over Rs9.8 trillion interest to banks at 20%. I ask my government why are we keeping interest rate at 20% when year-on-year inflation is 12% in June because of higher benchmark inflation of last year June,” Gohar questioned.
“We are all ready to pay taxes for the best future of our country. We must bring interest rate to 12% and spend this savings of Rs4 trillion from this interest cost by giving relief to salaried families,” he said, urging the government to charge maximum tax of 15% on salaried class.
Imposition of further taxes on salaried group to ‘accelerate brain drain’ in Pakistan: PBC
The remarks from the former caretaker minister come after the government increased tax liability for all persons earning more than Rs50,000 a month in Budget 2024-25.
Gohar said tax relief to salaried class will allow the domestic economy to grow. It will “give more buying power to them to spend in our economy which will bring more indirect tax revenue for the government and let them live their lives respectably,” he said.
Pakistan’s salaried group has seen taxation burden increase massively over the last few years as the government looks at what many call ‘soft targets’. In its attempt to increase tax-to-GDP ratio, it has often come under criticism for taxing Pakistan’s formal sectors and not going after informal sectors enough.
Moreover, the industrialist on Friday was of the view that the only way for Pakistan to pay off its foreign debt is not by taking more debt from friendly countries and other banks but to make industry and exports viable.
“We can pay foreign debt only by creating exports from agriculture, services and industry. Please come out of this mindset of taking more loans to pay existing loans.
American Dollar Exchange Rate