Salaried class pays Rs144bn in income tax in first quarter

Pakistan's salaried class paid Rs144 billion in income tax during the first three months of the current fiscal year, according to Federal Board of Revenue (FBR) sources, Rs13.4 billion, or 10.2 per cent, more than in the same period a year earlier. The figure again places salaried employees well ahead of two groups frequently cited in tax discussions: wholesalers, retailers and property sellers.

Wholesalers and retailers together paid Rs18.4 billion in income tax over the three months. Wholesalers contributed Rs6.2 billion, a decline of 10 per cent from last year, while retailers paid Rs11.3 billion, an increase of 8.3 per cent. The gap between the two sectors' combined contribution and that of salaried workers was Rs90 billion, according to the FBR figures.

Income tax collection from the real estate sector fell 38 per cent to Rs35.2 billion, a decline of Rs22 billion from the previous year. The government had halved advance income tax rates on property transactions, cutting the rate on property sales from 5.5 per cent to 2.75 per cent and the rate on purchases from 2.5 per cent to 1.25 per cent. FBR sources said advance tax collection on sales consequently dropped 42 per cent to Rs23 billion, while collection on purchases declined 31 per cent to Rs12.2 billion.

Taken together, retailers and the real estate sector paid Rs54 billion, compared with Rs144 billion from salaried individuals. According to FBR sources, the annual tax contribution of salaried workers rose from Rs391 billion before the IMF programme to Rs629 billion after the two-year programme, and they continue to account for a substantial share of income tax collection despite a claimed Rs52 billion of relief in the latest budget.