BEFORE the additional 10 per cent surcharge on higher income brackets of the salaried class, the government hoped to mop up about Rs75 billion in additional taxes when it first proposed the budget.

The income tax hike that has been widely bemoaned by the crushed middle-income group is roughly a third of the losses made by stateowned enterprises in FY23.

In simpler terms, government-run companies are making significant losses that contribute to the national budget deficit. This gap is then filled by raising taxes on salaried individuals, a segment already facing economic pressures. Meanwhile, the entire staff of the National Assembly and the Senate will receive the equivalentof three basic salaries.

Fluctuating around Rs200bn for the past decade, they are nearly double the combined federal budget allocations for education and healthcare in FY25 (Rs93bn and Rs27bn respectively). In a country where nearly 23m children aged 5-16 are out of school, the losses made by government institutions vastly outnumber the allocation to increase literacy.

The situation goes beyond just the losses. According to the Ministry of Finance`s Aggregate Annual Report on federal SOEs, the power sector alone accumulated losses of Rs304bn in FY23 despite receiving Rs759bn in government support. •