KARACHI: A World Bank proposal to increase revenue by raising taxes on the salaried class has invoked the ire of professionals across the country, who are already reeling from high inflation.

According to suggestions included in WB’s Pakistan Development Outlook, the overarching goal is to expand the tax base by bringing previously untaxed segments into the tax net and rationalising government expenditures.

If accepted, these recommendations could place additional financial burdens on the already heavily taxed income group, which currently pays taxes on their gross earnings.

However, given the recent surge in inflation, the salaried class is experiencing considerable financial strain.

“This proposal is undoubtedly problematic. I firmly believe that even individuals earning over Rs50,000 should receive tax relief, considering the current circumstances,” All Private Schools Association (APSA) Chairman Tariq Shah said.

Danish Uz Zaman, who heads the Private Schools Management Association, called it ‘inhumane’ to burden people with limited amount of income with taxes. He said many teachers were already grappling with the challenge of managing their households on meagre salaries and imposing additional financial burdens on them was “unjust and warrants condemnation”.

Adil Askari, a member of the Pakistan Engineering Council, emphasised that such a measure would exacerbate the hardships faced by the middle-class population. “Pressuring people who are already struggling to pay the bills doesn’t seem like a smart idea,” he said.

Dr Umer Sultan of the Young Doctors Association said the suggestion could ‘mistakenly’ categorise Pakistan as a ‘developed’ country, despite its status as a developing nation grappling with numerous challenges.

“In my view, even the people who’re earning in six figures are not financially stable. How is an international organisation that speaks of ‘human rights’ expecting population of an underdeveloped country to pay tax while they’re barely paying bills?” he said.

Published in Dawn, October 5th, 2023

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