As the government intensifies efforts to broaden the tax base and boost revenue, fresh data reveals that Pakistan’s salaried class paid more than twice the total income tax contributed by exporters and retailers combined during the fiscal year 2024-25 (FY25).
According to the Federal Board of Revenue (FBR), salaried individuals contributed a record-breaking Rs545 billion in income tax during the fiscal year that ended on June 30, 2025—making them the highest contributors among all sectors in terms of direct taxation.
In stark contrast, exporters paid only Rs180 billion, despite earning in foreign currency, while retailers—widely seen as politically influential across party lines—contributed just Rs62 billion under Sections 236G and 236H of the Income Tax Ordinance.
“This means the salaried class contributed more than double the combined tax payments of exporters and retailers,” a senior official told the publication.
Comparatively, the salaried class paid over three times more than exporters and eight times more than retailers. The Rs545 billion collected in FY25 also marked a significant increase from Rs367 billion in FY24—reflecting an additional Rs178 billion paid by salaried taxpayers year-over-year.
Despite the launch of the much-publicized Tajir Dost Scheme (TDS) to bring retailers into the tax net, the initiative failed to meet its objectives. As a result, the FBR now plans stricter enforcement against non-compliant retailers.
Last year, the FBR generated tax revenue from retailers under Section 236G, which imposes a 2% tax on gross sales of distributors, dealers, and wholesalers (excluding fertilizer sales), and Section 236H, which levies a 2.5% tax on gross sales of non-filing retailers—effectively pushing more businesses to enter the formal tax system.
In response to concerns over the growing tax burden on salaried individuals, FBR Spokesman and Member Tax Policy Dr. Najeeb Memon confirmed adjustments in tax rates for lower-income slabs.
He stated that the tax rate for the first income slab (Rs0.6 million to Rs1.2 million) was reduced from 5% to 1%, while the second slab (Rs1.2 million to Rs2.2 million) saw a cut from 15% to 11%. These measures are expected to provide Rs50 billion in relief to the salaried class during FY26.
