PTI’s Gohar suggests tax exemption for salaried class earning upto Rs2.2m annually
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PTI Chairman Barrister Gohar Khan on Tuesday suggested increasing the minimum taxable income to Rs2.2 million per annum from the current Rs0.6m to provide relief to the salaried class.
The government has proposed a new income tax structure in the federal budget. The revised rates offer tax cuts of up to 80 per cent for low-income salaried individuals, while limiting relief for higher earners to just 3pc. The tax exemption limit has remained unchanged at Rs50,000 per month.
Speaking in the National Assembly on Tuesday during ongoing budget discussions, Gohar proposed that employees earning up to Rs2.2m annually should be exempted from income tax.
“In the income tax slabs, there is no tax on earnings up to Rs600,000 per year. This should be increased to Rs 2.2m or it will be an injustice,” the PTI leader asserted.
Taxpayers earning between Rs600,000 to Rs1.2m annually will now face a 1pc tax rate, down from 5pc, offering up to 80pc tax reduction. For annual incomes between Rs1.2m and Rs2.2m, the rate will drop to 11pc from 15pc (on the amount exceeding Rs1.2m).
For annual salaries between Rs2.2m and Rs3.2m, the rate drops from 25pc to 23pc (on the income exceeding Rs2.2m). No percentage change was made for the remaining two slabs, except reductions in the fixed sums.
A 1pc surcharge reduction has been proposed for individuals earning above Rs10m to discourage skilled professionals from emigrating. Meanwhile, pensioners drawing over Rs10m annually will now be taxed at 5pc.
During the NA session, Gohar also expressed concern over high budgetary allocations for several government departments.
He stated that the National Accountability Bureau had been allocated Rs7.5 billion despite “filing less than a hundred accountability cases last year”.
“The previous PDM government made amendments that there will be no accountability below Rs500m,” he said, referring to the changes to the country’s anti-graft laws that were upheld by the Supreme Court last year.
As a result, Gohar said, the accountability watchdog only filed 98 cases. He added that the National Assembly has been allocated a budget of Rs16bn despite being “one of the worst performing in the world”.
The PTI chairman further said that the “actual” inflation rate was much higher than projected.
“The government is claiming inflation has reduced to 3.7pc, but the policy rate is 11pc. The actual inflation rate is much higher. If it was 3.7pc, the policy rate would be 7-8pc,” he told the NA.
Stressing the need for “out-of-the-box solutions” to provide relief to the public, Gohar claimed Pakistan had the lowest growth rate among the least developed economies, and the highest level of people living below the poverty line.
A recent report by the World Bank, issued based on a survey conducted in 2018-19, stated that almost 45pc of Pakistan’s population lives below the poverty line. The findings came in the wake of World Bank’s update of global poverty lines.
Speaking on other budgetary measures, the PTI leader recommended abolishing the stamp duty on property sales.
He also criticised the government for failing to bring pension reforms or completing the privatisation process of the Pakistan International Airlines.
‘Inadequate health budget’
Gohar also expressed concerns over reducing the federal health budget from Rs 54bn to Rs46bn and allegedly axing several projects.
He expressed concern that over a third of the country’s children were out of school. A report issued last year by the Pak Alliance for Maths and Science (Pams) puts that figure at 25.3m, or 36pc of children in Pakistan.
Leaders of other political parties, including the ruling PML-N’s ally PPP, also voiced their concerns over the budget, according to remarks carried by state-owned Radio Pakistan reported.
PPP’s Shazia Marri called on the government to address employees’ problems and questioned not increasing the minimum wage.
Syed Hussain Tariq, another PPP lawmaker, said the agriculture sector should be supported to ensure food security.
Echoing Gohar’s remarks, Shahida Begum of the Jamiat Ulema-i-Islam — Fazl (JUI-F) termed the budget allocated for education and health inadequate, emphasising that this should be enhanced to 4pc of the GDP.
PPP MNA Sehar Kamran also said health and education have been “neglected” in the budget.
However, Syed Aminul Haque of the Muttahida Qaumi Movement-Pakistan (MQM-P) alluded to the positive economic indicators, including the fall in inflation, as well as the increase in foreign exchange reserves and remittances.
He noted that international financial institutions were recognising the country’s economic recovery, Radio Pakistan added.
Minister for Kashmir Affairs and Gilgit-Baltistan Amir Muqam highlighted relief planned for the people, including employees, in the budget.
PML-N’s Malik Ibrar Ahmed insisted the government has presented a “people-friendly budget”, saying it envisages a vision to take the country forward on the path of development.
