The salaried class continues to bear 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).
In the first six months of the ongoing fiscal year, the salaried class paid a total of Rs266 billion in income tax. This marks an increase of Rs23 billion compared to the same period of the previous year, reaffirming salaried employees as the leading contributors to direct taxes.
According to FBR figures, salaried individuals are forced to pay up to 38% of their total income in taxes. Officials noted that despite rising inflation and cost-of-living pressures, tax deductions from salaries continue uninterrupted.
Non-corporate employees
Non-corporate salaried employees paid Rs117 billion in taxes during the six-month period. Tax collection from this segment increased by 14%, with non-corporate employees alone contributing Rs23 billion more than last year.
Employees in the corporate sector paid Rs82 billion in income tax in the first half of the fiscal year. According to the FBR, tax payments by corporate employees increased by 13% compared to the same period last year.
Withholding tax collection boost
Significant improvement was also recorded in tax collection from the real estate sector. Withholding tax amounting to Rs126 billion was collected in six months, reflecting stronger enforcement and transaction activity.
Tax collection on the sale of plots rose sharply by 66%, reaching Rs87 billion, according to FBR data. Meanwhile, withholding tax on the purchase of plots increased by 29%, reaching a record Rs39 billion.
Govt employees’ tax payments
Income tax paid by provincial government employees declined by Rs39 billion compared to the previous period. In contrast, income tax collection from federal government employees increased by 8%, reaching Rs27 billion in six months.
The FBR reported that total income tax collection exceeded Rs3,000 billion during the first six months of the fiscal year. The salaried class alone accounted for nearly 10% of the total income tax collected nationwide.
Traders largely outside tax net
Despite improvements in salaried and real estate tax collection, traders continue to remain largely outside the documented tax system. As a result, tax collections from the trading sector remain limited, officials acknowledged.
During the previous fiscal year, the salaried class paid a total of Rs555 billion in taxes. FBR officials say current trends indicate that salaried employees will again remain the backbone of income tax collection this year.
