Salaried Class Forced to Pay Record Rs. 391 Billion Income Tax in 9 Months

Pakistan’s salaried class paid a record Rs. 391 billion in income tax during July–March FY2024, making up 10 percent of total income tax collection. This amount exceeds the Rs. 368 billion collected from the salaried class in the entire previous fiscal year, marking a 56 percent year-on-year spike. Traders contributed only Rs. 26 billion, and wholesalers and distributors just Rs. 17.5 billion, with nearly half unregistered. For every Rs. 10 collected from salaried workers, traders paid only Rs. 0.60. The government had aimed to collect an additional Rs. 75 billion from salaried persons this fiscal year, but the figure has already crossed Rs. 140 billion with three months remaining. Employees are taxed on gross income, with no relief for expenses, and the highest slab now faces a 38.5 percent effective rate. Non-corporate employees paid Rs. 166 billion (up 43 percent), corporate employees Rs. 117 billion (up 52 percent), provincial government staff Rs. 69 billion (up 103 percent), and federal employees Rs. 39 billion (up 65 percent). The FBR faces a Rs. 714 billion shortfall against its revised Rs. 12.3 trillion annual target, with final collections projected around Rs. 11.7 trillion, despite Rs. 1.3 trillion in new taxes. Lower growth and inflation have impacted overall revenues.