On the demand of the International Monetary Fund (IMF), preparations have been completed to further depress the salaried class across Pakistan. The IMF has asked Pakistan to keep the salaried class and entrepreneurs in the same category of income tax.
The upper limit of taxable income of the salaried class is being brought down. As a result, those earning Rs 333,000 per month will have to pay more or less 35% income tax.
At present, 35% income tax is being charged on the basis of Rs 3 lakh 33 thousand per month from the business persons, while the highest income tax for the salaried class starts from the limit of Rs 5 lakh per month.
The IMF has mandated the government to keep the income tax exemption limit at Rs 50,000 per month, not to give any further concessions. As a result, the lower middle class people whose monthly salary is between 50 thousand and 1 lakh will be affected.
Due to increasing inflation, the purchasing power of people belonging to the lower middle class is decreasing rapidly. The IMF, in its budget recommendations, has said that available income tax credits and allowances for teachers and researchers should be abolished.
The IMF plans to borrow an additional Rs 650 billion from businesses and the salaried class to enable the government to pay interest and principal on its loans. As a result of this plan, fixed-wage earners will be further burdened.
