Salaried Class Outpaces Exporters in Tax Contributions for Fiscal Year
The salaried class has emerged as a major contributor to Pakistan’s tax revenue, paying a significant 158 billion rupees in taxes during the first half of the current fiscal year. This represents a substantial 38 percent increase compared to the same period last year and is 243 percent more than the taxes deposited by wealthy exporters. In stark contrast, exporters, despite earning Rs 4.3 trillion, contributed only Rs 46 billion in taxes, highlighting a glaring disparity in tax contributions between the two groups.
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The salaried class now ranks as the fourth-largest tax-paying segment, following contractors, bank depositors, and importers. From July to December, income tax collections from salaried individuals grew by an impressive 38 percent. Sindh province led the contributions with 66 billion rupees, predominantly from Karachi, which accounted for 57 billion rupees or 36 percent of the total tax. Punjab followed with 59.4 billion rupees, including 33 billion rupees from Lahore. Contributions from Islamabad, Balochistan, and Khyber Pakhtunkhwa were 19 billion, 4.2 billion, and 9 billion rupees, respectively.
Experts predict that the salaried class will exceed Rs 300 billion in tax contributions by the end of the financial year. During the first half of the year, the Federal Board of Revenue (FBR) collected Rs 1.25 billion in withholding tax, which is 57 percent of the total income tax. Tax collections from contractors and service providers grew by 31 percent, reaching 228 billion rupees, while tax on loan profits surged by 58 percent to 220 billion rupees. Importers also made significant contributions, paying 189 billion rupees in income tax. This shift underscores the vital role of the salaried class in strengthening the nation’s revenue, surpassing traditional heavyweights in the export sector.
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