Taxation of salaried class essential for economic growth, says finance minister

Aurangzeb clarifies tax rate remains capped at 35%, with adjustments made in slabs

News Desk June 13, 2024
Federal Minister for Finance and Revenue Muhammad Aurangzeb. PHOTO: APP

Finance Minister Muhammad Aurangzeb, while dismissing protests staged by journalists against the increase in taxes imposed on the salaried class, has said that without levying taxes on the ‘affluent’, progress cannot be made.

Addressing a post-budget press conference in Islamabad on Thursday, which was attended by Minister of State for Finance, Revenue and Power Ali Pervaiz Malik, Federal Board of Revenue (FBR) Chairman Amjed Zubair Tiwana, and Finance Secretary Imdadullah Bosal, the finance czar reaffirmed the government's stance on the newly-unveiled tax policy.

Before the start of the press conference, the media personnel expressed their concerns regarding the imposition of billions of rupees in taxes on the salaried class, demanding a reduction in the unfair burden of taxes on them.

Aurangzeb clarified that the tax rate for the affluent class remains capped at 35%, with adjustments made in tax slabs. He reiterated the government's commitment to increasing the tax-to-GDP ratio to 13% over the next few years through progressive taxation.

Read more: Govt aims to boost tax-to-GDP ratio to 13% by 2027: FM Aurangzeb

The finance minister emphasised the need to document the economy as a second principle of the budget, acknowledging the challenges in FBR's functioning and aiming to minimise human interference through digitisation.

He maintained that the government is moving towards progressive taxation, with higher tax rates being applied to higher incomes. He said the tax rate for non-filers has been increased to 45% to discourage tax evasion and promote tax compliance, adding that this step aims to eradicate tax evasion in Pakistan.

The minister further stated that the budget has been presented based on five fundamental principles, with the petroleum levy maintained at the same level. Any increase in the Petroleum Development Levy (PDL) will be gradual and aligned with international prices, he added.

He also announced that taxes will be imposed on retailers from July onwards, with work already underway on this scheme.


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