Salaried Workers Paid Rs555 Billion in Income Tax in FY24

Salaried individuals paid a record Rs555 billion in income tax in the last fiscal year, marking a significant increase from the previous year. This amount was double the combined taxes paid by retailers and the real estate sector. The contributions by salaried workers, who pay taxes on their gross salaries without much flexibility, reduced their take-home pay.

According to the Federal Board of Revenue, salaried individuals contributed Rs555 billion in income tax during the fiscal year 2024-25. This amount was 51% higher than the previous fiscal year. The government, under Prime Minister Shehbaz Sharif, had raised the tax burden on the salaried class, aiming to generate additional income taxes.

Despite the significant contributions from salaried individuals, the FBR fell short of its annual collection target by around Rs1.2 trillion. Non-corporate sector employees paid Rs236.5 billion, corporate sector employees paid Rs165 billion, provincial government employees paid Rs99.5 billion, and federal government employees paid Rs54.2 billion in income tax during the last fiscal year.

The total income tax collected was Rs5.8 trillion, with the salaried class contributing one-tenth of this amount. In contrast, retailers contributed only Rs38 billion, and wholesalers and distributors paid Rs25 billion in withholding tax.

The government's efforts to bring retailers into the tax net have faced challenges, with enforcement measures falling short of expectations. The real estate sector also saw increased tax burdens in the last budget, resulting in higher tax collections but still below targets.

Overall, the taxes paid by salaried individuals surpassed those paid by retailers and the real estate sector combined, highlighting the significant contribution of the salaried class to the country's tax revenue.

According to the source: The Express Tribune.