Salaried Class Pays Over Rs266 billion in Income Taxes
Salaried Pakistanis pay Rs266bn+ in taxes, while large sectors remain largely untaxed.
Ateeq Ur Rehman
Pakistan’s salaried taxpayers are carrying the heaviest load in the country’s tax system, contributing over Rs266 billion in the last fiscal year.
FBR data shows that this group’s contribution continues to rise, with nearly Rs158 billion collected in the first half of FY 2023, 24 alone, a 38% jump from the previous year. Salaried individuals, whose taxes are mostly deducted at source, rank fourth in withholding taxes after contractors, banks, and importers.
Yet, experts argue this reliance is unsustainable. According to Business Recorder, large sectors like agriculture, about 20% of GDP, generate less than 1% of income tax. Real estate and wholesale/retail trade, with untapped potential in the hundreds of billions, remain largely outside the tax net.
“The salaried class bears the brunt of fiscal policy,” said an FBR official. “Expanding the tax base beyond this segment is crucial for sustainable revenue growth.”
Recent budget tweaks have increased taxes on individuals earning over Rs200,000 monthly, while incentives for businesses have left middle-income workers shouldering most of the burden. Analysts warn that without broadening the tax base, the pressure on salaried taxpayers will only grow.
The FBR faces the dual challenge of maintaining revenue targets while ensuring the system is fair. For now, the salaried class continues to pay a disproportionate share, highlighting deep structural gaps in Pakistan’s taxation system.
Stay updated with the latest news here.
