Why Pakistan’s Salaried Class Is Paying the Highest Taxes
Salaried individuals in Pakistan continue to shoulder a heavy share of the country’s tax load. According to provisional figures released by the Federal Board of Revenue (FBR), salaried taxpayers paid Rs266 billion in income tax during the first half of the current fiscal year (July–December). This amount makes up almost 10% of Pakistan’s total income tax collection for the period.
What stands out is that the salaried class paid more than double the tax contributed by the real estate sector during the same six months. Compared to last year, this is an increase of Rs23 billion (around 9%), showing that tax deductions from salaries are steadily rising year after year.
According to sources, when book adjustments are factored into the picture, the collections from the salaried class had already breached the Rs300 billion mark at mid-year. These figures do not even include taxes deducted from certain contractual employees under Section 153-B, which means the actual contribution may be even higher.
Who Paid How Much?
• Non-corporate employees: Paid Rs117 billion (14%)
• Corporate sector employees: Rs82 billion (up by 13%)
• Federal government employees paid Rs27 billion (8% increase)
• Provincial government employees paid Rs39 billion, showing a slight decrease of 7%
Why Is the Salaried Class Under Pressure?
Experts point out that salaried individuals effectively pay around 38% of their gross income in taxes, which is far higher than many other sectors. Unlike businesses or traders, salary earners cannot hide income because tax is deducted directly at source.
In contrast, real estate contributed Rs126 billion in withholding taxes during the same period—less than half of what salaried individuals paid. Even within real estate, most tax came from plot sales, while taxes on plot purchases dropped after rate reductions in the budget.
Total income tax collection during the first half stood at Rs3.03 trillion, but FBR is still behind pace to meet its annual target. Despite this, policymakers continue to rely heavily on the salaried class, even discussing penalties for non-filers within this already documented group.
Final Thoughts
The numbers clearly show one thing: Pakistan’s salaried class is doing more than its fair share. While they contribute consistently and transparently, many other sectors remain under-taxed. Going forward, real tax reform will only succeed if the burden is shared more evenly, rather than repeatedly squeezing those who are already fully compliant.