Pakistan’s salaried class paid Rs. 420 billion in income tax during the first nine months of the current fiscal year, according to provisional data compiled by the Federal Board of Revenue, highlighting the growing tax burden on formal wage earners.
The amount collected during the July to March period was Rs. 29 billion higher, or 7.5 percent more, than the Rs. 391 billion collected in the same period last year. The data shows that salaried individuals contributed more than double the taxes paid by the real estate sector during the same period.
Tax payments from the real estate sector stood at Rs. 197 billion, largely through withholding taxes on the sale and purchase of plots, despite sluggish activity in the property market over the past two years.
Within the salaried segment, non-corporate sector employees paid the highest amount at Rs. 187 billion, followed by corporate sector employees at Rs. 134 billion. Provincial government employees contributed Rs. 59 billion, while federal government employees paid Rs. 41 billion.
The figures come at a time when the salaried class is also facing rising living costs due to higher fuel prices and household expenses linked to the Middle East conflict. According to the report, the salaried class is paying around 38 percent of gross income in taxes, significantly higher than many regional peers and well above the effective burden on sectors such as retail and real estate.
Meanwhile, the government is considering tax relief proposals for the upcoming budget, including cuts in withholding taxes on property transactions and possible relief for first time home buyers. These proposals are expected to be discussed with the International Monetary Fund next month before the budget is finalized.
Did you notice that the taxes collected are from home buyers not businesses. So where are the corporate taxes which are paid by the real estate companies ? We need taxes on profits not on buying homes.