ISLAMABAD: Pakistan’s salaried class continues to shoulder the largest share of the nation’s tax burden, contributing significantly to government revenue during the first half of the current fiscal year, according to data released by the Federal Board of Revenue (FBR).
Salaried Employees Lead in Tax Payments
In the first six months of the ongoing fiscal year, salaried individuals paid Rs266 billion in income tax. This represents an increase of Rs23 billion compared to the same period last year. FBR officials said this confirms that salaried employees remain the top contributors to direct taxes in the country.
The FBR noted that salaried individuals are forced to pay up to 38% of their total income in taxes. Despite rising inflation and cost-of-living pressures, deductions from salaries continue without interruption.
Non-Corporate and Corporate Employees
Non-corporate salaried employees contributed Rs117 billion, marking a 14% increase from last year. This segment alone paid Rs23 billion more than during the same period previously.
Corporate employees, on the other hand, paid Rs82 billion in income tax during the six months. Their contributions grew by 13% compared to the same period last year, highlighting consistent compliance among formal sector workers.
Boost in Withholding Tax Collections
The FBR also recorded strong growth in withholding tax collections, particularly from the real estate sector. Over six months, Rs126 billion was collected from this category, showing higher enforcement and increased transactions.
Tax collected on sale of plots surged by 66%, reaching Rs87 billion. Meanwhile, withholding tax on purchase of plots grew by 29%, hitting a record Rs39 billion.
Government Employees’ Tax Contributions
Income tax payments from provincial government employees fell by Rs39 billion compared to the previous period. In contrast, federal government employees paid Rs27 billion, reflecting an 8% increase over six months.
The FBR reported that total income tax collection across Pakistan exceeded Rs3,000 billion during the first half of the fiscal year. Salaried employees alone accounted for nearly 10% of the total nationwide income tax collection.
Traders Remain Largely Untaxed
Despite progress in salaried and real estate tax collections, traders remain mostly outside the tax net. Officials acknowledged that tax contributions from this sector are still limited due to underreporting and low compliance.
During the last fiscal year, the salaried class contributed a total of Rs555 billion in taxes. Current trends indicate that salaried employees are likely to remain the backbone of Pakistan’s income tax system this year.
