In the first five months of the current fiscal year, Pakistan’s salaried workers paid nearly Rs200 billion in income tax, a significant jump of Rs72 billion, or 57%, compared to the same period last year.
Despite this sharp increase, FBR has struggled to collect taxes from those outside the salaried class who are not paying their fair share. This has raised questions about the government’s efforts to expand the tax net.
Adding to the challenges, revenue generated from audits fell by 16% during the July-November period of FY 2024-25, dropping to Rs26 billion. This decline highlights the FBR’s inefficiencies in maximizing potential tax revenues.
Critics argue that the government relies too heavily on salaried individuals to meet tax collection targets, instead of implementing measures to ensure fair contributions from all sectors. Private sector employees are particularly impacted, as they account for the largest portion of income tax collected.
This approach has sparked concerns about inequality in the tax system, especially as the FBR continues to face a shortfall in overall tax collection.
Expanding the tax base to include non-compliant individuals and businesses could reduce the burden on the salaried class and improve revenue collection.
For now, salaried workers remain the backbone of Pakistan’s income tax revenue, shouldering a disproportionate share of the responsibility in an uneven system.
The situation underscores the urgent need for tax reforms to ensure fairness and sustainability in the country’s financial framework.
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