Salaried class pays Rs633bn in tax, outpaces exporters and real estate in FY2025-26

Pakistan's salaried class remained one of the country's largest taxpayers during the fiscal year 2025-26, contributing an estimated Rs633 billion in income tax

Pakistan’s salaried class remained one of the country’s largest taxpayers during the fiscal year 2025-26, contributing an estimated Rs633 billion in income tax—an amount that exceeded the combined tax payments made by exporters, the real estate sector, and retailers.

According to provisional figures compiled by the Federal Board of Revenue (FBR), the country’s total tax collection reached Rs13.01 trillion by the close of the fiscal year on June 30, 2026. The data highlights the growing reliance on taxes deducted at source from salaried individuals, whose income tax is automatically withheld by employers and deposited into the national treasury.

The latest figures show that income tax paid by salaried employees increased from Rs585 billion in FY2024-25 to approximately Rs633 billion in FY2025-26, reflecting an increase of nearly Rs48 billion over the previous year. The rise further underscores the significant burden borne by documented wage earners, who have consistently remained among the most compliant taxpayers.

In comparison, exporters contributed around Rs174 billion in income tax during FY2025-26, slightly lower than the Rs176 billion collected from the sector a year earlier. The marginal decline indicates that exporters’ overall tax contribution remained largely unchanged despite continued government support and incentives aimed at boosting foreign exchange earnings.

The real estate sector also remained a significant source of tax revenue through withholding taxes on property transactions. Under Section 236-C of the Income Tax Ordinance, which applies to property sellers, the FBR collected Rs191 billion during FY2025-26, compared with Rs118 billion in the previous fiscal year, marking a substantial increase in collections.

Meanwhile, tax receipts under Section 236-K, applicable to property buyers, stood at Rs87 billion, down from Rs120 billion collected during FY2024-25. The decline suggests comparatively lower collections from purchasers despite increased revenue from sellers.

The retail sector, another major component of the economy, contributed approximately Rs70 billion through withholding taxes collected under Sections 236-G and 236-H of the Income Tax Ordinance. These provisions relate to taxes collected from distributors, wholesalers, dealers, and retailers on various commercial transactions.

Combined, exporters, property sellers, and retailers contributed less in taxes than the salaried class alone, reinforcing concerns among economists that Pakistan’s formal wage earners continue to shoulder a disproportionately large share of the country’s direct tax burden.

The government has acknowledged these concerns and announced that the FY2026-27 budget includes tax relief measures for the salaried class as well as incentives for exporters to encourage investment, improve competitiveness, and support economic growth.

In addition, the government has pledged to reduce direct interaction between taxpayers and tax officials by expanding digital tax administration and automation within the FBR. The move is intended to improve transparency, minimize discretionary powers, and simplify tax compliance.

For the new fiscal year, the FBR has been assigned an ambitious tax collection target of Rs15.264 trillion, requiring significant growth in revenue collection through improved documentation of the economy, stronger enforcement measures, and an expanded tax base.