Every year, Pakistan’s budget season comes with big promises: relief for the public, a stable economy, and better days ahead. But for salaried individuals, it usually has the opposite effect. It means more pressure on their already stretched finances.

The salaried class are one of the most visible and documented parts of Pakistan’s economy. Their taxes are deducted directly from their salaries, leaving little room to adjust or avoid payments. For this reason, they have become the easiest group for the government to tax. Every year, small changes in tax rates, new surcharges, consumable items, or transportation quietly reduce their take-home income. 

At the same time, their expenses keep rising. Salaries do not increase much, but the cost of living does. Rent, electricity, fuel, groceries, and school fees have all gone up sharply. For many families, income is no longer keeping up with basic needs. This gap is creating a serious problem. People are earning, but they are not really getting ahead. Savings are shrinking, and financial security feels harder to achieve. Many middle-class households are just trying to stay afloat. As the next budget approaches, the real question is not whether there will be small relief measures. The question is whether the system itself will change, or whether the salaried class will once again be asked to carry the burden. Pakistan’s tax system relies heavily on both direct and indirect taxes. Direct taxes include income tax, while indirect taxes include GST, fuel charges, and utility taxes. While income tax is supposed to be based on how much you earn, indirect taxes affect everyone equally, regardless of income.

Over the years, the tax burden has quietly increased. Income tax rates have been adjusted, new charges have been introduced, and exemptions have been reduced. Even if these changes seem small on paper, they add up.

Then there are the hidden taxes. Fuel prices include multiple charges. Utility bills come with additional taxes. Even basic goods are taxed through sales tax. These may not always feel like taxes, but they reduce how much money people actually have left.

For salaried households, this means their income is being reduced from multiple sides. The same money is effectively taxed again and again as it moves through daily expenses.

This brings us to disposable income, the money left after taxes. In Pakistan today, this is shrinking. Even when salaries increase slightly, rising taxes and inflation cancel out that gain. In real terms, many people are either standing still or moving backward financially. This is especially true for middle-income earners who fall into higher tax brackets but lack strong financial cushions.

According to Pakistani Entrepreneur and author Muhammad Burhan Mirza, this shift is already visible. “When income becomes tight, the first thing people cut is extra spending. But after that, they also stop taking risks. They delay starting businesses, avoid investments, and even rethink career moves,” he explains.

This has a wider impact. When people spend less, businesses earn less. When investment slows, innovation slows. When risk-taking drops, new opportunities decrease. The economy as a whole begins to lose momentum.

Looking ahead, a bigger concern is that people may start to disengage completely.

Burhan Mirza points out that for the salaried class, the situation is becoming harder to justify. “At some point, people start asking if it is worth it. If they are paying more but not getting growth or security in return, they look for other options,” he says.

This is already happening. Many skilled individuals are moving abroad or working remotely for international companies. They are choosing systems where their effort leads to better financial outcomes. If this continues, it can affect productivity, innovation, and overall economic growth.

At the policy level, the problem is clear. The system depends too much on a small, easy-to-tax group, rather than bringing more people into the tax net. Burhan Mirza highlights this gap. “Right now, the focus is on collecting from those already in the system because it is easier. But that is a short-term solution. In the long run, it creates an imbalance,” he notes.

Without serious efforts to document the informal economy and expand the tax base, this pattern will continue. Pakistan’s current system creates a difficult reality. The people who follow the rules are the ones who end up paying the most. This is not just about higher taxes. It is about how the system works. When people feel they are being treated unfairly, it changes how they plan their lives, careers, and futures. As incomes shrink and costs rise, the salaried class is being pushed into a corner, forced to limit spending, avoid risks, and in some cases, look for opportunities elsewhere. As Burhan Mirza points out, the issue is not just taxation, but the design of the system itself. It continues to rely on a few while leaving many outside it.

Unless this changes, the outcome is predictable. An economy that continues to rely on its most compliant group will slowly weaken the very foundation it depends on.