The salaried class in Pakistan has emerged as the leading contributor to income tax revenue during the current fiscal year, significantly outpacing the wholesale and retail sectors. This disparity highlights the uneven distribution of tax burdens across different segments of the economy.
In the first seven months of the fiscal year (July 2024 to January 2025), the salaried class contributed a remarkable Rs284 billion in income tax. This marks a substantial increase from Rs184 billion during the same period last year, reflecting a rise of Rs99 billion. The sharp uptick underscores the growing tax burden on this demographic, which continues to play a pivotal role in bolstering national tax revenues.
In contrast, the wholesale sector contributed only Rs13.7 billion, while the retail sector added Rs19.4 billion over the same period. These figures reveal a stark imbalance in tax contributions, with the salaried class contributing significantly more than these key sectors.
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The real estate sector also demonstrated robust tax contributions, with Rs63.8 billion collected from property sales and Rs65.7 billion from purchases. These figures highlight the sector’s critical role in Pakistan’s tax revenue structure, particularly through transaction-linked taxes.
FBR’s Revenue Collection Progress
As of January 30, 2025, the Federal Board of Revenue (FBR) had collected over Rs800 billion in tax revenue, nearing its January target of Rs956 billion. With the fiscal year progressing, FBR officials remain optimistic about achieving the monthly target soon.
The FBR has set an ambitious target of Rs3150 billion for the quarter ending in March 2025. With anticipated increases in economic activities during March, revenue collection is expected to rise, potentially offsetting any previous shortfalls.
December 2024 marked a historic milestone for the FBR, with a record-breaking tax collection of Rs1330 billion—the highest in its history. Despite this achievement, the FBR fell short of its half-year target, collecting Rs5624 billion in the first six months of the fiscal year, Rs384 billion below projections.
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The data underscores the disproportionate tax burden on the salaried class, which continues to be the backbone of Pakistan’s tax revenue system. At the same time, it highlights the need for a more equitable tax framework that ensures balanced contributions from all sectors, including wholesale, retail, and real estate.
