The salaried class has become the biggest contributor to Pakistan’s income tax in the first quarter of the 2025-26 fiscal year. Between July and September, salaried individuals paid a total of Rs. 130 billion in income tax, an increase of Rs. 20 billion compared to Rs110 billion collected during the same period last year. This shows an 18% growth in tax collection from salaried workers.
The increase reflects stronger compliance and improved efficiency in tax collection from this segment. However, despite this positive trend, Pakistan’s overall revenue still fell short by Rs. 200 billion during the first quarter.
One major reason for this shortfall was the Rs. 70 billion loss in tax revenue caused by the floods, which disrupted business operations and economic activity in several regions.
While the revenue gap remains a concern, Pakistan received international recognition for its ongoing tax reforms.
The World Bank praised the country’s efforts, describing its reform program as a global success story. The recognition focused on the Finance Ministry and FBR for their institutional reforms, digitization initiatives, and strategies to expand the tax base.
These reforms aim to make the tax system more transparent, efficient, and inclusive. Experts believe that if these efforts continue, Pakistan could see further improvements in tax collection and financial stability.
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