Salaried individuals paid Rs85 billion in income tax during July–August FY25, compared to Rs70 billion last year. This marked a 21% increase despite the government’s marginal rate reduction. Finance Minister Muhammad Aurangzeb admitted the relief was insignificant due to limited fiscal space.
Record-High Contributions
Last year, the salaried class contributed Rs555 billion, up 51% from the previous year. Their income is taxed on gross salaries, leaving little room for deductions. Government claims of Rs56 billion in relief for incomes up to Rs3.2 million proved minimal against actual contributions.
Sector-Wise Breakdowns
Non-corporate sector employees paid Rs41.5 billion, up 26%. Corporate sector employees contributed Rs20 billion, also a 26% rise. Provincial government employees paid Rs10.5 billion, while federal employees contributed Rs7.6 billion, both reflecting modest increases. FBR spokesman Dr. Najeeb Memon did not respond to queries about this rising burden.
Weak Pension Tax Collection
The government introduced a new tax on pensions exceeding Rs10 million annually. Yet, in July–August, only Rs180 million was collected. Annual receipts may reach slightly above Rs1 billion, falling far short of expectations.
Controversy Over SECP Salaries
Parliamentary committees are probing perks and salaries of SECP officials. Audit findings showed commissioners received excessive allowances and benefits, including Rs1.9 million annually for security guard payments. Senator Anusha Rahman criticized house rent, utility allowances, and club memberships. She proposed bills to curtail SECP and State Bank salary-setting powers.
Traders and Real Estate Sector
Despite rising contributions from salaried persons, enforcement against traders remains weak. Reversals of measures, including restrictions on ineligible transactions, undermined collection. In real estate, higher taxes on non-filers and late filers slowed growth. Withholding tax changes lifted plot sale collections to Rs28 billion, a 92% rise. However, property purchase collections fell 12% to less than Rs13 billion.
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