A.   Background (BG)

This refers to the related Important TLQCs in trail, blue, italic and double line (a) 2968 of 9.12.24 about Psx over 100,000 Index but no Tax Reduction on inflation and utility charges (b)2883 of 29.8.24 about Salaried Class Tax: Index Based Tax Relief, Tax on Tax, etc. & KCV(c) 2877 of 17.8.24 about IMF really wanted Higher Tax on Salaried class OR it’s a Misstatement

2. We also refer to several Other TLQC including (a) 2832 of 11.7.24 about 470% Increase in Pakistan Tax from Salaried Class Tax in 6 years (d) 2828 of 8.7.24 about Heavy Tax Burden, 40% Expected Inflation & What do? 

B.   Updated Commentary

 Further to KQU3299, being an important matter, we would inform you about Overburdened with taxes (Attachment 3073.1) in the ensuing paragraph, with emphasis in bold & Underline for quick reading.

1. The federal government's push to achieve macroeconomic stability continues to take its toll on the salaried class thanks to an unfair distribution of the tax burden across different segments of society and various sectors of the economy.

 2. The taxmen have collected a staggering Rs 331 billion worth of income tax from the salary class in the first eight months of the ongoing fiscal year. In contrast, the retailers, most of whom are unregistered, contributed a mere Rs 23 billion in the same period in terms of withholding income tax. Thus, the salaried individuals contributed 1,350% more in taxes than the retailers, even though there is no dearth of retailers who are making much more than those in the highest monthly wage bracket.

3. While the amount of income tax paid by exporters so far this year is not known, the figures for the previous fiscal year show that they paid a meagre Rs 93.5 billion in taxes on an income of $30.6 billion, as against Rs 368 billion contributed by salaried individuals in the same period. This means that this affluent segment of society contributed only a quarter of what the white-collar salaried workforce did.

4. Still, the tax contribution from salaried individuals – which is far higher than should be due and far bigger than their capacity – is not enough for the rulers to seek relief for them from the IMF. A case in point is the rejection by the global lender of what was going to be a Pakistan Day gift to the nation in the form of a substantial Rs 8 per unit cut in the power tariff. Before that an expected Rs14 per liter drop in the petrol price was held back too.

5. But the poor salaried class continues to pay the price of being the only source of guaranteed revenues for the FBR. This speaks of the incompetence, inability and complicity of the tax collectors as regards extracting the due amount of tax from the big fish – even though they were only recently given a Rs 32.5 billion package of incentives by the government meant to act as a performance booster. And their performance is there for all to see!

C. Multiplication

Although all the Commentaries are to the extent of the Subscribed IDs only, however, your Goodself is allowed to share this QC for the Noble Cause to save the Overburdened Salaried Class.

D.   Further Details & Services 

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Advisory, Statement or Return Filing or Review services, or related accounting matters like the above, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com. Your Goodself may continue to get other services from your current Tax & Legal Advisors.

Best regards for Here & Hereafter

Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner 

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc

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