Pakistan’s salaried class has become one of the biggest contributors to tax collection in the current fiscal year, paying Rs420 billion in income tax during the first nine months, according to provisional figures released by the Federal Board of Revenue.
Even with ongoing economic challenges, this figure shows a 7.5 percent rise compared to R391 billion collected during the same period last year.
During the same timeframe, the real estate sector contributed Rs197 billion in withholding taxes, marking a 17 percent increase, although the sector itself has remained slow over the past two years. Taxes paid by salaried individuals from both public and private sectors were more than double the amount collected from the real estate sector.
Among salaried taxpayers, non corporate employees contributed the highest share at Rs187 billion. Corporate employees followed with Rs134 billion. Federal government employees paid Rs41 billion, while provincial government employees contributed Rs59 billion, showing a 14 percent decrease.
The pressure on salaried individuals has grown as fuel and household expenses continue to rise. Higher petrol and diesel prices, linked to geopolitical tensions in the Middle East, have added to the financial burden. Reports suggest that salaried workers pay nearly 38 percent of their gross income in taxes, which is much higher than the average in neighboring countries.
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At the same time, the government continues to depend heavily on withholding taxes rather than expanding the overall tax base. Changes in property tax policies have increased rates for non-filers and introduced penalties for late filers. Taxes on plot sales have gone up sharply, while collections from property purchases have fallen because of reduced rates.
Income from capital gains in the real estate sector remained low at Rs1.7 billion, while deemed income tax brought in only Rs1.2 billion. Meanwhile, fiscal measures supported by the IMF are currently under review, as a delegation from the International Monetary Fund is expected to visit next month to examine budget proposals and planned tax reforms.