Pakitan Business Council (PBC) has warned of the upcoming ‘brain drain’ with the new taxes in place with the government’s budget for 2024-2025.
The PBC is concerned with the high-level taxes imposed by the government on the salaried class. PBC has raised issues over high levels of taxes forcing skilled labor to leave Pakistan.
Pakistan Economic Survey 2023-2024 showed an increase in the number of skilled laborers proceeding to leave Pakistan rising to 119%, increasing from 20, 865 to 45, 687. PBC stated “ the 119% increase in the number of Pakistanis emigrating is surely a major cause for concern”
This increase is an aftermath of the government imposing high tax liabilities on the private sector and those earning more than 50, 000 per month.
Further in-depth analysis of the budget has shown that the tax imposed has increased by Rs 22, 500 for a year’s earning of Rs. 6 million (Rs. 500, 000 per month). Anyone earning Rs. 12 million per year will also pay Rs. 22,500.
PBC has also pointed out that skilled laborers leaving Pakistan will transition from tax to the untaxed sector.
Also Read: Brain Drain: Over 1.5 Lac People From Rawalpindi Left Pakistan For Work
PBC further said that such an imposition is ‘unjust’. “Unlike a government, which can print money and borrow to fund the 20-25% increase in salaries of its employees, the private sector will be adversely affected by a higher brain drain as professionals seek lower-taxed environments in and outside Pakistan,” PBC said.
“Further increasing the tax rate while realizing the fact that salary income is taxed on a gross basis, is an anomaly and needs to be rectified,” – PBC
Moreover, PBC stated that many skilled professionals turn to other nations due to low inflation and tax rates found in foreign countries.
