The Pakistan Business Council (PBC) has raised serious concerns over a 119 percent increase in the emigration of experienced and highly skilled Pakistani professionals.
“The 119% rise in the number of emigrating Pakistanis is alarming. Many of these individuals are seasoned, high-quality professionals that the formal sector is losing. The proposed changes in tax slab rates, especially the earlier application of the 35% top rate, will accelerate this brain drain,” the PBC stated in a tweet on X.
The PBC highlighted that the formal sector suffers not only from the loss of talent due to emigration but also from the shift of these individuals to the informal, untaxed sector. Salaried employees bear numerous costs that the state is supposed to, but fails to, cover.
“The proposal to increase tax revenue from this sector is unjust. Unlike the government, which can print money and borrow to fund the 20-25% salary increase for its employees, the private sector will be severely impacted by a higher brain drain as professionals seek lower-taxed environments within and outside Pakistan,” it added.
Last week, the federal government proposed an income tax of up to 35 percent on the salaried class in the budget for 2024-25. The new tax slabs are as follows:
Sr # Taxable Income Rate of Tax
- Where taxable income does not exceed Rs. 600,000 – 0%
- Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000 – 5% of the amount exceeding Rs. 600,000
- Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,200,000 – Rs. 30,000 + 15% of the amount exceeding Rs. 1,200,000
- Where taxable income exceeds Rs. 2,200,000 but does not exceed Rs. 3,200,000 – Rs. 180,000 + 25% of the amount exceeding Rs. 2,200,000
- Where taxable income exceeds Rs. 3,200,000 but does not exceed Rs. 4,100,000 – Rs. 430,000 + 30% of the amount exceeding Rs. 3,200,000
Where taxable income exceeds Rs. 4,100,000 – Rs. 700,000 + 35% of the amount exceeding Rs. 4,100,000
