Again salaried class?

The IMF’s new tax prescription for the salaried class is simply irrational, and will lead to revulsion. It is quite unfortunate that the lender, as well as successive governments, only believe in burdening an already obliterated section of society duly contributing to the revenue generation. Whereas, there is no dearth of holy cows, especially the big businesses including the real estate and agriculture, who are widely off the tax hook and are rather found to be on the beneficiary side of subsidies and exemptions. Thus, the proposal to tax the salaried and business individuals at a single income threshold is unfair, to say the least. The suggestion to slap a 35% income tax rate at a monthly income of Rs333,000, and withdraw all income tax credits and allowances from teachers will add to economic woes. It seems the beleaguered coalition dispensation after signing on the dotted lines with the Fund, and under a compulsion to generate Rs9.5 trillion taxes, is risking its credibility and survival. The plan to raise an additional Rs650 billion from the lower strata of employees by undoing tax slabs to less than four does not seem to be wise advice. Though there are no two opinions that the tax net must be extended and the wider pie of informal economy regulated, doing it on statistical assumptions by penalising the salaried class is not a sound option, rather it speaks of lack of writ and willingness to come down hard on those who thrive on the premise of being well-connected. This elite capture of the economy is untenable. With around 5.3 million active taxpayers, as of December 2023, and the Fund asking to tax anyone with a salary of Rs51,000 per month, rather than relaxing the ceiling owing to inflation and dipping purchasing power, the entire paradigm is up for a toss. A degenerated growth forecast of less than 2%, inflation at 40%, and an unemployment rate of 7%, the budgetary figures cannot be fixed at the sole expense of salaried segments. Think genuine, and out of the box. Published in The Express Tribune, May 9th, 2024. Like Opinion & Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.  

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