Salaried Class Appeals to Supreme Court Against ‘Unfair Taxes’ in Budget

The Salaried Class Alliance of Pakistan has appealed to the Supreme Court of Pakistan to take suo moto notice against the unfair taxation policies introduced in the Finance Budget 2024-25.

Announced on June 12, 2024, this budget marks the third consecutive year where the burden of taxation has disproportionately fallen on the salaried class, while efforts to broaden the tax base remain neglected, said the appeal.

The Finance Budget has set an ambitious tax collection target of Rs. 12,970 billion for the Federal Board of Revenue (FBR), reflecting a 38 percent increase from the previous year’s goal. However, this target places undue emphasis on extracting revenue from those who are already tax-compliant and contributing significantly to the GDP, it added.

The proposed measures increase taxes on salaried individuals without providing corresponding benefits in public services or relief from inflationary pressures. The lack of deductions against salary income exacerbates the burden on this segment of society.

The salaried class, already strained by high inflation and inadequate services, faces escalated tax rates without corresponding benefits or relief measures. The government’s approach neglects opportunities to broaden the tax base by targeting non-filers and the informal sector, which is crucial for equitable taxation. Increased taxation contributes to a brain drain of skilled professionals and capital flight, which is detrimental to Pakistan’s economic growth and stability. Discrepancies in tax treatment between private sector salaried individuals and others highlight unjust taxation policies.

The Salaried Class Alliance urges the Court to restore equitable tax rates and reinstate tax credits for investments and insurance premiums for salaried individuals. They also advocate for measures to enforce taxation on non-active taxpayers and informal sectors, aligning with international best practices and economic principles.

Additionally, they request the Supreme Court’s intervention through a Suo Moto notice to review the constitutional validity and fairness of the tax measures proposed in the Finance Budget 2024-2025.

The alliance has appealed to the apex court, under Article 184(3) of the Constitution of Pakistan, to uphold justice and protect the rights of the salaried class and all taxpayers in Pakistan. They argue that the current taxation policies threaten economic stability and fairness.

The urgent attention and intervention of the Court are sought to ensure that taxation policies align with principles of equity, economic growth, and national development, the alliance added.