Salaried Class Pays Rs91 Billion In Two Months

Pakistan’s salaried workforce contributed Rs91 billion in income tax during the first two months of fiscal year 2026-27, more than twice the combined Rs40 billion collected from the real estate and wholesale and retail sectors, as tax receipts from the latter segments declined.

Income tax paid by salaried individuals rose by Rs6.3 billion, or 7.5%, during July-August compared with the same period last year.

In contrast, tax collection from the real estate sector dropped 29% to Rs28 billion from Rs39.4 billion a year earlier, representing a decline of Rs11.2 billion. As a result, salaried taxpayers contributed 225% more income tax than the property sector.

The difference was even greater when compared with wholesalers and retailers. Their combined withholding tax contribution stood at Rs12 billion during the first two months, down Rs440 million, or 3.5%, from the corresponding period last year.

According to the data, salaried taxpayers paid Rs79 billion more than wholesalers and retailers, representing a 658% higher contribution.

The contrasting tax collections followed relief measures introduced for both salaried individuals and the real estate sector under the 2026-27 federal budget.

The government provided Rs52 billion in tax relief to salaried taxpayers by cutting tax rates by up to 3%, removing the 9% surcharge linked to the highest 35% tax rate, and raising the annual income threshold for the top tax rate from Rs4.1 million to Rs7 million.

Meanwhile, advance tax on the sale and purchase of immovable property was reduced by 50%.

For property sellers, three existing slabs were consolidated into a single 2.75% rate, compared with the previous 5.5%. Consequently, advance income tax collected on property sales declined by Rs8.6 billion, or 32%, falling from Rs27 billion to Rs18.4 billion.

On property purchases, the tax rate was reduced from 2.5% to 1.25%. Collections in this category fell by Rs2.7 billion, or 22%, from Rs12.4 billion to Rs9.7 billion.

The weaker performance of the real estate, wholesale and retail sectors comes as the Federal Board of Revenue also faces pressure in meeting its overall revenue targets. The FBR missed its August collection target by Rs27 billion, while year-on-year growth remained almost flat.

In the previous fiscal year, the FBR collected Rs13.01 trillion in taxes, an increase of Rs1.26 trillion, or around 11%, compared with the preceding year.