Salaried class pays Rs420bn tax in nine months as real estate contributes Rs197bn

Provisional data from the Federal Board of Revenue (FBR) shows that Pakistan’s salaried class contributed Rs420 billion in income tax during the first nine months (July–March) of the current fiscal year, highlighting a rising tax burden on fixed-income earners amid ongoing economic pressure.

The figures indicate an increase of Rs29 billion, or 7.5%, compared to Rs391 billion collected during the same period last year. Despite economic slowdown and inflationary pressures, salaried individuals in both public and private sectors remained the country’s largest direct tax contributors.

According to the data, tax contributions from salaried individuals were more than double those collected from the real estate sector, which generated Rs197 billion through withholding taxes during the same period. While activity in the property market remained sluggish over the past two years, withholding taxes still rose 17%, largely due to higher rates on property sales and non-filers.

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Within the salaried segment, non-corporate employees contributed Rs187 billion, while corporate employees paid Rs134 billion. Federal government employees paid Rs41 billion, up 7%, whereas provincial government employees contributed Rs59 billion, marking a 14% decline.

Economic conditions have added further strain on salaried households, with rising fuel prices and utility costs increasing overall living expenses. Analysts note that indirect pressure from inflation and geopolitical developments has further reduced disposable incomes.

Meanwhile, tax policy debates continue as the government seeks to broaden the tax base. However, reliance remains heavily on withholding taxes, particularly from salaried individuals and transactions in the real estate sector. Proposals under discussion include adjustments to property transaction taxes and potential relief measures, though these are expected to be reviewed in consultation with the International Monetary Fund (IMF) during upcoming budget discussions.

Officials also indicated that real estate tax structures may be revised, including possible reductions in certain transaction levies, as part of broader fiscal reforms aimed at stabilising revenue collection.