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Pakistan’s salaried class paid a record Rs391 billion in income tax during July to March of FY2024 – a 56 percent increase compared to the same period last year.
This marks the highest-ever tax paid by salaried individuals in nine months and already exceeds the Rs368 billion collected from them in the entire previous fiscal year. The record income tax by the salaried class now makes up 10 percent of the country’s total income tax collection.
According to media reports, traders paid only Rs26 billion, and wholesalers and distributors contributed just Rs17.5 billion, nearly half of whom are unregistered. In contrast, for every Rs 10 collected from salaried workers, traders contributed merely Rs 0.60.
The government had planned to raise Rs 75 billion in additional tax from salaried workers this fiscal year, but the target has already been surpassed, with Rs 140 billion collected and three months still to go.
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These employees are taxed on gross income with no deductions for living expenses, and the top salary slab faces an effective rate of 38.5 percent.
Among contributors, non-corporate employees paid Rs 166 billion, showing a 43 percent rise, while corporate employees paid Rs 117 billion, up by 52 percent.
On the other hand, provincial government workers paid Rs69 billion – a massive 103 percent increase – while federal employees contributed Rs39 billion, up 65 percent.
Despite imposing Rs 1.3 trillion in new taxes this year, the Federal Board of Revenue (FBR) is still facing a shortfall of Rs 714 billion against its revised Rs12.3 trillion annual target.
The total revenue collection is expected to reach only Rs 11.7 trillion.
