ISLAMABAD: The salaried class continues to shoulder the largest share of Pakistan’s tax burden, contributing significantly more to national revenue during the first six months of the current fiscal year, according to official data released by the Federal Board of Revenue (FBR).
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Figures show that salaried individuals paid Rs266 billion in income tax during the first half of the fiscal year, marking an increase of Rs23 billion compared to the same period last year. This reaffirmed salaried employees as the single biggest contributors to direct taxes.
According to the FBR, salaried individuals are paying up to 38% of their total income in taxes. Despite rising inflation and mounting cost-of-living pressures, tax deductions from salaries have continued without interruption.
Non-corporate and corporate employees
Non-corporate salaried employees contributed Rs117 billion in taxes during the six-month period, reflecting a 14% increase year-on-year. This segment alone paid Rs23 billion more in taxes compared to the same period last year.
Employees in the corporate sector paid Rs82 billion in income tax, with collections from this group rising 13% compared to last year, the FBR data showed.
Withholding tax collections surge
The real estate sector also recorded a notable increase in tax collection. Withholding tax worth Rs126 billion was collected during the six months, indicating stronger enforcement and higher transaction volumes.
Tax collection on the sale of plots surged by 66% to Rs87 billion, while withholding tax on plot purchases rose 29% to Rs39 billion, reaching record levels.
Government employees’ contribution
Income tax paid by provincial government employees declined by Rs39 billion compared to the previous year. In contrast, tax collection from federal government employees rose by 8%, reaching Rs27 billion during the period under review.
Overall, total income tax collection exceeded Rs3 trillion in the first six months of the fiscal year, with the salaried class accounting for nearly 10% of the total.
Traders remain outside tax net
Despite improved collections from salaried individuals and real estate transactions, traders continue to remain largely outside the documented tax system, limiting revenue from the sector, officials acknowledged.
In the previous fiscal year, the salaried class paid Rs555 billion in taxes. FBR officials said current trends suggest salaried employees will once again form the backbone of income tax collection this year.
