ISLAMABAD: Pakistan’s salaried class paid over Rs420 billion in income tax during the first nine months (July to March) of fiscal year 2025-26, according to sources in the Federal Board of Revenue (FBR).
The latest figures show that income tax collection from salaried individuals increased by 7.38 percent compared to Rs391 billion collected during the same period of the previous fiscal year. The rise once again reflects the growing tax burden on the country’s formal workforce, which remains among the most compliant segments of taxpayers.
Officials said that tax collected from salaried persons has now emerged as the second-largest source of withholding tax revenue after collections from contracts and supplies.
During July–March 2025-26, the FBR collected Rs572 billion in withholding tax from contracts and supplies, compared to Rs451 billion in the corresponding period last year, showing a sharp increase in revenue from this head.
Other sectors also posted growth in withholding tax contributions. Tax collection from retailers rose to nearly Rs32 billion, up from Rs26 billion in the same period last year. Likewise, tax receipts from wholesalers increased to Rs19 billion, compared to Rs17.55 billion a year earlier.
Overall, the total withholding tax collection reached around Rs2.25 trillion during the first nine months of the current fiscal year, compared to Rs2.13 trillion collected in the same period of the previous year.
The increase in overall tax collection indicates stronger enforcement measures by tax authorities as well as continued efforts to document different sectors of the economy.
Tax experts believe the consistent rise in tax payments by salaried individuals is largely due to the fact that this segment has very limited room for tax evasion, as taxes are directly deducted at source. In contrast, many other sectors still have greater flexibility to underreport income or remain outside the formal tax net.
The continued increase in taxation on salaried individuals has also raised concerns over the fairness of Pakistan’s tax structure, with many calling for broader tax reforms to ensure that all sectors contribute equally to the national revenue base.
