Salaried class contributes major share to income tax collection

ISLAMABAD: According to the latest report of the Federal Board of Revenue (FBR), the salaried class is bearing the largest share of the direct tax burden in the country.

According to the report, salaried individuals paid a total of Rs266 billion in income tax in the first six months of the current fiscal year, which is Rs23 billion more than the same period of the previous year.

According to FBR data, salaried individuals have to pay about 38 percent of their total income in the form of direct tax. Officials say that despite inflation and rising expenses, tax deductions from salaries are continuing without a hitch.

Non-corporate salaried employees paid Rs117 billion in taxes during the six months, which is 14 percent more than last year. During this time, they deposited an additional Rs23 billion in taxes. Corporate sector employees paid Rs82 billion in taxes during the same period, which is 13 percent more than last year.

The real estate sector also saw an improvement in tax collection. During the six months, Rs126 billion was collected in the form of withholding tax, in which the sale of plots increased by 66 percent and the withholding tax reached Rs87 billion.

The withholding tax on the purchase of plots also increased by 29 percent, which reached Rs39 billion.

Income tax paid by provincial government employees decreased by Rs39 billion compared to the previous year, however, collections from federal government employees increased by 8 percent and reached Rs27 billion.

According to the FBR, the total income tax collection from July to December 2025 exceeded Rs3,000 billion, but tax collection from traders and the wealthy class did not improve.

The report states that the salaried class alone contributed about 10 percent of the total income tax collected across the country. In the last fiscal year, the salaried class paid Rs555 billion in taxes.