Property Tax Collection Falls 28% as Salaried Workers Pay Rs91bn in Two Months
ISLAMABAD: Pakistan’s salaried class paid more than three times as much income tax as the real estate sector during the first two months of the current fiscal year, highlighting the widening disparity in tax contributions between salaried workers and property transactions.
According to tax officials and Federal Board of Revenue (FBR) data, salaried workers paid Rs91 billion in income tax during July and August, an increase of Rs6.3 billion, or 7.5%, compared with the same period last year. In contrast, income tax collection from the real estate sector declined to Rs28 billion, compared with Rs39.4 billion during the corresponding period last year.
Apple debuts iPhone 18 Pro and iPhone 18 Pro Max
The latest figures mean the salaried class contributed around Rs63 billion more, or approximately 225% more, than the real estate sector during the two-month period. The decline in property-sector collections has been attributed largely to major reductions in advance tax rates on property transactions introduced in the latest federal budget.
Under the revised tax structure, the advance tax on property sales was reduced from 5.5% to 2.75%, while the rate on property purchases was cut from 2.5% to 1.25%. Consequently, advance income tax collected on property sales dropped from Rs27 billion to Rs18.4 billion, a decline of Rs8.6 billion or 32%. Tax collection from property purchases fell from Rs12.4 billion to Rs9.7 billion, down Rs2.7 billion or 22%.
Tax Burden Widens: Salaried Workers Contribute Rs79bn More Than Property Sector
| Sector / Category | July-August Last Year | July-August Current Year | Change | Change % |
|---|---|---|---|---|
| Salaried Class | Rs84.7bn | Rs91bn | +Rs6.3bn | +7.5% |
| Real Estate Sector | Rs39.4bn | Rs28bn | -Rs11.4bn | -28% approx. |
| Property Sales Tax | Rs27bn | Rs18.4bn | -Rs8.6bn | -32% |
| Property Purchase Tax | Rs12.4bn | Rs9.7bn | -Rs2.7bn | -22% |
| Wholesale & Retail | Rs12.44bn | Rs12bn | -Rs0.44bn | -3.5% |
The government also provided around Rs52 billion in tax relief to salaried workers in the latest budget by reducing income tax rates by up to three percentage points. It abolished the 9% surcharge on the highest tax rate of 35% and increased the annual income threshold for the maximum 35% rate from Rs4.1 million to Rs7 million.
Despite these measures, salaried households continue to face pressure from higher living and transportation costs. Fuel prices and petroleum-related levies have added to household expenses, particularly for middle- and lower-middle-income families dependent primarily on fixed salaries.
Renowned Paraglider and Diver Asif Mahmood Dies in Chitral Accident
FBR data also showed that the wholesale and retail sectors contributed around Rs12 billion in withholding taxes during the first two months, down Rs440 million or 3.5% from the previous year. The salaried class therefore paid approximately Rs79 billion more than the combined wholesale and retail sector.
The figures come amid broader questions about FBR’s revenue performance and the effectiveness of enforcement measures. The tax authority reportedly missed its August collection target by Rs27 billion, while overall growth remained relatively flat.
FBR collected Rs13.01 trillion during the previous fiscal year, an increase of around 11% over the preceding year. However, with nominal GDP also growing by approximately 10.8%, the tax-to-GDP ratio remained around 10.3%, indicating limited improvement in overall tax mobilisation.
The government had introduced additional tax measures worth around Rs312 billion in June 2025, while FBR has continued efforts involving digitisation, faceless taxation, production monitoring and litigation. The latest sector-wise figures, however, have renewed debate over whether the country’s tax system is placing a disproportionate burden on documented salaried taxpayers while providing greater relief to sectors such as real estate.
ABHI Microfinance Bank Partners with Mahmood Group to Boost Employee Financial Wellness
