Fiscal Progress: Pakistan’s Tax Collection Reaches New High

Provincial government employees’ tax payments nearly triple to PKR 56 billion, highlighting a dramatic increase across all sectors

Salaried Workers Lead Pakistan’s Tax Collection Surge

The income tax contributions from Pakistan’s salaried class have soared to a record PKR 331 billion during the first eight months of the current fiscal year, representing a substantial increase of PKR 115 billion compared to the same period last year.

Corporate and Non-Corporate Tax Collection Shows Dramatic Growth

According to official sources, tax collection across all employment sectors has shown remarkable growth:

• Non-corporate sector employees: Contributed PKR 140 billion, a dramatic PKR 100 billion increase from the previous year
• Corporate sector employees: Paid PKR 100 billion, up PKR 34 billion year-over-year
• Provincial government employees: Nearly tripled their contribution to PKR 56 billion, compared to just PKR 18 billion last year
• Federal government employees: Increased payments to PKR 33 billion, up PKR 13 billion from last year’s PKR 20 billion

IMF-Approved Tax Reforms Drive Revenue Increase

The significant rise in tax collection follows the government’s implementation of an enhanced income tax framework approved by the International Monetary Fund (IMF), which imposed up to 35% income tax on salaried individuals in the current fiscal year budget.

Export Sector and Property Transactions Bolster Revenue

Beyond salary-based income tax, additional revenue streams showed strong performance:

• Exporters contributed PKR 58 billion through the 1% advance tax on export proceeds
• Federal Board of Revenue (FBR) collected PKR 60 billion under section 154(1) from export proceeds
• Property transactions generated PKR 74 billion from sales and transfers of immovable properties, reflecting a PKR 17 billion increase over the same period last fiscal year

Banking and Investment Income Taxation Yields Significant Revenue

The FBR also reported substantial collections from investment and banking sources:

• PKR 242 billion collected as profit on debt from bank accounts/depositors
• PKR 29 billion from government securities
• PKR 19 billion from National Savings Certificates (NSC) and Post Office depositors
• PKR 58 billion from dividend taxation

This comprehensive tax collection performance demonstrates the expanding tax base across Pakistan’s economy and the effectiveness of recent fiscal policy reforms.