As the salaries for the month of July hit bank accounts, the salaried class is howling at the new taxes.

At Rs300,000, a well-educated person in a bank, multinational or organisation of a similar calibre would be in middle management. It’s a stage of life when the parents are old, but the kids are young. While the external trappings of wealth are there, there is still the juggle of electricity bills with the astounding private school fees.

The year 2018 appears to be a different era, one where AI had not become the latest buzzword of opportunities and threats when no one had expected a pandemic, a near global recession, the Russia-Ukraine war, or locally the floods and Pakistan’s close brush to sovereign default. Given what the years have held, it is hard to imagine that the latest income tax rates are actually quite similar to those in 2018.

While the gap widens at higher salary levels, according to data from BeFiler, for those earning Rs200,000 a month, the tax of Rs20,167 in 2018 is less than the current amount of Rs19,167. For those earning Rs300,000, the difference is paltry — around Rs4,500 higher than the rate in 2018.

However, the appetite to take the hit of a higher income tax has waned as this group strives ever harder to leave for greener pastures where career progression equals a higher purchasing power, not an endless sinking in the quagmire of ever rising prices that make increments meaningless.

Published in Dawn, The Business and Finance Weekly, July 29th, 2024