Salaried Individuals Pay More Than Major Economic Sectors
The salaried class has once again emerged as the single largest income tax contributor in Pakistan. Latest data from the Federal Board of Revenue (FBR) highlights this trend. During the first seven months of fiscal year 2025-26, salaried individuals paid Rs315 billion in income tax.
This amount exceeds the combined contribution of exporters, retailers, and property buyers and sellers. Together, these three major sectors paid Rs293 billion during the July-January period of FY26.
The figures show a clear gap. The salaried class paid Rs22 billion more than these powerful sectors combined. This development comes just before the upcoming IMF review mission. It raises questions about tax equity and burden sharing in Pakistan’s economy.
The data indicates that politically influential and economically strong segments are contributing less than the salaried workforce. Many experts believe this could influence upcoming tax reforms and budget discussions for 2026-27.
Exporters and Retailers Lag Behind in Tax Contributions
FBR data shows that exporters paid Rs50 billion in income tax during the first seven months of FY26. In the same period last year, exporters paid Rs54 billion.
In addition, exporters paid Rs51 billion as 1% advance tax. This brings their total contribution to Rs101 billion in FY26. The figure remains unchanged compared to the same period of the previous fiscal year.
Retailers, who operate around three million outlets across Pakistan, also made limited contributions. Under Section 236G, retailers paid Rs15 billion as advance tax on sales to distributors, dealers, and wholesalers. Last year, this amount stood at Rs13.5 billion.
Under Section 236H, retailers paid Rs25 billion during the same period. This is higher than Rs19 billion paid last year. Despite the increase, their total tax contribution remains modest compared to the salaried class.
These numbers show that sectors with wide business networks and significant cash flows are still paying less than fixed-income employees.
Property Sector Taxes and Future IMF Talks
The property sector also contributed through taxes on the sale and purchase of immovable property. Under Section 236C, the FBR collected Rs105 billion from property sales during the first seven months of FY26. This is a sharp rise from Rs65 billion collected in the same period last year.
Under the 2025-26 budget, tax rates vary based on transaction size. For Active Taxpayer List (ATL) members, a 4.5% tax applies to transactions up to Rs50 million. A 5% rate applies to transactions between Rs50 million and Rs100 million. A 5.5% rate applies to transactions exceeding Rs100 million.
Non-ATL individuals face a higher tax rate of 11.5%. Late filers must pay between 7.5% and 9.5%, depending on transaction value.
On property purchases, the FBR collected Rs47 billion in FY26, compared to Rs66 billion last year. Reduced tax rates were introduced for ATL members. These include 1.5% for transactions up to Rs50 million, 2% for transactions up to Rs100 million, and 2.5% for amounts exceeding Rs100 million.
Meanwhile, the salaried class paid Rs315 billion in taxes during the July-January period. Last year, they paid Rs284 billion in the same timeframe.
The newly formed Tax Policy Office under the Finance Ministry is expected to review the tax structure. It remains to be seen whether authorities will convince the IMF to reduce the tax burden on salaried individuals in the 2026-27 budget.
