Salaried individuals paid Rs. 266 billion in income tax during the first half of the current fiscal year, accounting for nearly one rupee out of every Rs. 10 collected in income taxes nationwide, according to provisional figures compiled by the Federal Board of Revenue.
The data, reported by The Express Tribune, shows that tax payments by salaried persons rose by Rs. 23 billion, or 9 percent, compared to the same period last year, when collections stood at Rs. 243 billion, excluding book adjustments.
After adding book adjustments, income tax payments by salaried individuals had already crossed Rs. 300 billion by the end of the July to December period.
These figures are also exclusive of payments made by certain contractual employees under Section 153 B of the income tax law.
Pakistan’s salaried workforce remains unfairly taxed as the Federal Board of Revenue continues to rely on a narrow tax base, placing the burden of revenue collection on existing taxpayers, primarily salaried individuals and manufacturers. Salaried employees pay about 38% of their gross income in taxes, a level significantly higher than in regional peers and far above the effective tax contribution of sectors such as real estate and retail.
Overall, the FBR collected Rs. 3.03 trillion in income taxes in the first half of the fiscal year, with nearly 10 percent coming from salaried individuals who pay tax on gross income without expense adjustments. Non-corporate employees contributed the highest amount, paying Rs. 117 billion, an increase of 14 percent compared to last year.
Corporate sector employees paid Rs. 82 billion, up 13 percent, while federal government employees contributed Rs. 27 billion, showing an 8 percent increase. In contrast, provincial government employees paid Rs. 39 billion, reflecting a 7 percent decline year on year.
The heavy reliance on salaried taxpayers has drawn criticism amid the FBR’s struggle to meet its downward revised tax target of Rs. 6.5 trillion.
To manage collections, the tax authority resorted to taking large advance payments and delaying refunds, yet overall growth remained below 10 percent, nearly half the pace required to meet the annual target.
Collections from traders remained limited during the period, as several enforcement measures were diluted or reversed.
Meanwhile, the real estate sector recorded mixed trends. Withholding tax collections on plot sales increased by two-thirds to Rs. 87 billion, while collections on plot purchases fell 29 percent to Rs. 39 billion. In total, withholding taxes from the real estate sector reached Rs. 126 billion, up 17 percent during the first half of the fiscal year.
The report also noted that the newly introduced tax on wealthy pensioners, applied to annual pensions exceeding Rs. 10 million, generated negligible revenue and is unlikely to yield more than Rs. 1 billion annually.
