Salaried class pays Rs633bn in tax, more than exporters, retailers and real estate combined

• Exporters paid Rs174 billion, down from previous year.
• Real estate withholding tax collections show mixed results.
• Retailers contribute roughly Rs70bn in withholding taxes.
  

ISLAMABAD: Pakistan's salaried class contributed Rs633 billion in income tax during fiscal year 2025-26, surpassing the combined tax contribution of exporters, the real estate sector and retailers, The News reported, citing provisional data compiled by the Federal Board of Revenue.

The Federal Board of Revenue (FBR) has fetched Rs13,010 billion in the last fiscal year ending on June 30, 2026, out of which the salaried class stood out as one of the major contributors, as the tax was deducted at the source and deposited into the national kitty.

The FBR’s provisional data compiled so far shows that with the book adjustments, the salaried class paid tax of Rs633 billion in the fiscal year 2025-26 compared to Rs585 billion in the same period of the previous fiscal year 2024-25.

The exporters, who earned in foreign exchange, have paid income tax of Rs174 billion in the fiscal year 2025-26 compared to Rs176 billion paid in 2024-25. It indicates that there is no major difference in their contribution on account of income tax in the last two years.

From the real estate sector, the tax machinery collects withholding taxes on transactions from sellers and purchasers under the Income Tax section of 236-C and 236-K, respectively.

Under 236-C, the FBR has collected Rs191 billion in the fiscal year 2025-26 compared to Rs118 billion in the same period of the previous financial year of 2024-25. Through 236-K, the FBR collected Rs87 billion in the fiscal year 2025-26 against Rs120 billion in the same period of the previous financial year 2024-25.

The retailers’ contribution on account of withholding tax under 236-G and 236-H stands at approximately Rs70 billion in the fiscal year 2025-26 compared to Rs62 billion in the same period of the previous fiscal year.

In the last fiscal year, the FBR collected Rs25 billion from retailers under Section 236-G compared to the collection of Rs24 billion in the previous fiscal year. Under 236-H, the FBR’s collection from retailers stood at Rs45 billion in 2025-26 compared to Rs38 billion in the same period of the previous financial year.

Now the FBR’s ambitious tax collection target was fixed at Rs15,264 billion, while the tax relief was provided to major contributors of taxes in the ongoing fiscal year.

The FBR high-ups hoped that the tax relief would be provided to middle-income and higher-income earners of the salaried class, the exporters’ tax rate would be reduced, and real estate transaction taxes rationalised, with the hope that the economic activities would pick up pace and tax collection would go up in the current fiscal year through the use of technology and artificial intelligence.

Now it’s a challenge for the FBR to maximise revenue collection with the adoption of a new operating model in the Inland Re Service (IRS) by abolishing interaction between the taxpayers and tax officials.