FINANCE Minister Muhammad Aurangzeb is right to wonder why salaried taxpayers have to navigate a tax return form so complicated that even an MBA graduate would struggle to fill it. But that concern will mean little unless the authorities simplify the form. The salaried class is among the most documented and compliant segments of the economy. Deduction of their tax at source leaves little room for concealment or manipulation. But they continue to face a disproportionate compliance burden when filing returns. Simplifying the return form, as has been done for traders, would be more than a convenience. It would recognise that taxpayers who already fulfil their obligations should not have to deal with unnecessary complexity. But easier filing alone will not address the larger problem. Salaried taxpayers need substantially greater relief than what was offered in the FY27 budget. They have borne a heavy tax burden for years, while inflation has eroded their real incomes. In many households, nominal salary increases have merely compensated for higher food, housing, education, transport and utility costs, while progressive taxation has pushed more income into higher tax brackets.
The salaried middle class should not be an endlessly convenient source of revenue. Unlike large parts of the informal economy, salaried workers have little opportunity to understate income, negotiate tax liabilities or shift earnings outside the formal system. Their compliance is automatic. This highlights the basic issue of tax fairness. Broadening the tax base is essential, particularly by bringing undertaxed segments of the informal economy into the net. Revenue mobilisation should not rely disproportionately on those who are already fully documented. The government’s efforts to register traders through a simplified fixed-tax regime will be useful only if they produce a balanced distribution of the tax burden. It is about time the government revisited the income-tax structure for salaried people, raised the thresholds at which higher rates apply and ensured that future salary-tax adjustments take inflation and real purchasing power into account. Pakistan needs a wider tax base, not simply higher taxation of the easiest taxpayers to identify. Providing meaningful tax relief to the salaried class along with simplifying the return form should be the government’s primary objective.
Published in Dawn, August 23rd, 2026
