IN the realm of fiscal responsibility, it is crucial for any nation to maintain a balanced tax system that promotes economic growth while ensuring fairness and equality. The recent data provided by the Federal Board of Revenue (FBR) illustrates an alarming discrepancy in the tax contributions of different income groups. The salaried class, comprising hardworking individuals earning income through regular jobs, has shouldered a significant burden, paying a staggering Rs264.3 billion in income tax during the fiscal year 2022-23. Notably, this amount represents nearly two hundred percent more than the combined taxes paid by the country’s exporters and under-taxed retailers. Such a glaring disparity raises questions about the fairness and effectiveness of the existing tax structure.
The burden on the salaried class further intensified as the taxes they paid saw a sharp increase of forty percent compared to the preceding year. These individuals are already grappling with the adverse effects of inflation and rising prices of essential goods and services. The soaring cost of living directly affects their purchasing power and quality of life. In the light of these challenges, it becomes evident that they require significant relief to alleviate their financial burdens. On the other hand, exporters, who earned a substantial $27.7 billion in the last fiscal year, contributed a disproportionately meagre sum of seventy four billion rupees in taxes. Despite a 17.4% increase in their tax contributions from the previous year, it pales in comparison to the rise in their income. It is imperative to address this issue by introducing a more progressive tax structure where higher-income individuals and businesses contribute a higher percentage of their earnings in taxes. This would ensure that those who earn more contribute proportionately more towards the nation’s development. Loopholes and exemptions that allow certain sectors to evade their fair share of taxes needs to be identified and addressed accordingly. By promoting transparency and accountability, the tax system can be strengthened and made more effective. By working towards a just and balanced tax structure, the country can foster economic growth and prosperity for all its citizens.
