Pakistan Salaried Workers Hit Rs.391B Tax Record

In a remarkable show of compliance and contribution, Pakistan’s salaried class has paid a record-breaking Rs.391 billion in income taxes during the first nine months of the current fiscal year. This record collection underscores the increasing burden on the middle class while raising important questions about the country's tax justice, policy, and economic planning.

• Salaried individuals contribute Rs. 391 billion in taxes from July 2023 to March 2024.

• Highest-ever tax collection from the salaried class in Pakistan’s history.

• Experts raise concerns over the disproportionate burden on fixed-income groups.

• No matching contribution from untaxed or under-taxed sectors like traders and landlords.

• Policy analysts call for broader tax reforms and equity in tax enforcement.

According to official figures released by the Federal Board of Revenue (FBR):

• The amount collected from the salaried class alone stands at Rs.391 billion for the first three quarters of FY 2023-24.

• Compared to the previous fiscal year, this marks a significant increase of nearly 30%, showing greater enforcement and compliance.

• The FBR’s data reflects growing dependence on formal income earners to meet revenue targets.

This surge in salaried individuals' tax payments is seen as a direct result of tax hikes, inflation-driven bracket creep, and improved digital monitoring systems.

• Public and private sector employees are the largest contributors.

• Salaried individuals in grade 16–20 jobs, IT professionals, bankers, engineers, and MNC employees form the core base.

• Automatic deductions at source make compliance mandatory for formal sector workers, unlike other segments of society.

“The middle class, with no room to evade taxes, ends up bearing the weight of economic adjustments,” said a senior tax expert.

• The government revised tax slabs in the 2023-24 Budget, increasing the tax burden on incomes above Rs.50,000/month.

• Introduction of minimum tax thresholds and increased rates for higher income brackets.

• Salaries adjusted for inflation have pushed employees into higher tax brackets, even though purchasing power has decreased.

• Greater FBR focus on e-filing, withholding tax enforcement, and integration with NADRA and banking systems has improved tracking.

• Since other sectors like retailers, agriculture, and real estate remain under-taxed or untaxed, the formal workforce becomes the go-to segment for revenue.

Despite this record collection, Pakistan’s overall tax system continues to show significant inequities.

• Retail & Wholesale Traders: Less than 1% file taxes.

• Agricultural Income: Constitutionally protected, barely taxed.

• Property Dealers & Landlords: Massive earnings, minimal contributions.

• Freelancers & Informal Sector: Largely outside the tax net.

This systemic disparity in enforcement leads to higher reliance on salaried employees, creating frustration among tax-compliant individuals.

“Why should a teacher pay more in taxes than a millionaire landlord?” asked a citizen on social media.

• Petrol, electricity, gas, and utility bills have all surged in the past year.

• Salaried people face a double hit — inflation and higher taxes.

• Private sector increments fail to match rising costs, leaving employees with less disposable income.

• Despite tax compliance, citizens face poor healthcare, public transport, and security, raising questions about the return on taxation.

The FBR has praised the salaried class for its contribution, but recognizes the need to bring more sectors into the tax fold.

“Efforts are underway to widen the tax base through digital integration, property tracking, and better coordination with NADRA and banks,” said an FBR spokesperson.

However, until real action is taken against tax evaders in elite sectors, the economic weight remains unfairly distributed.

While the record Rs.391 billion paid by Pakistan’s salaried individuals reflects strong compliance, it also exposes a deeper systemic flaw — an over-reliance on those who cannot escape tax net while others comfortably do.

If Pakistan is to move toward fiscal justice and economic stability, it must:

• Enforce equal taxation.

• Reward compliance.

• Build a system based on equity, fairness, and accountability.