In the first quarter of the current fiscal year, Pakistan’s salaried class paid a staggering Rs. 111 billion in taxes, a figure 1,550 percent higher than the taxes paid by traders, according to data from the Federal Board of Revenue (FBR). This amount also represents a 56 percent increase, or Rs. 40 billion more, compared to the taxes collected from salaried individuals during the same period last year.

Despite the imposition of 150 percent higher withholding tax rates on goods supplied, traders contributed only Rs. 6.7 billion in taxes. The FBR’s Tajir Dost scheme, designed to encourage tax compliance among registered retailers, has seen limited success, with only Rs. 1.2 million collected by mid-October.

Breaking down the contributions from the salaried sector, private sector employees paid Rs. 83 billion in income tax, facing rates as high as 39 percent. Government employees contributed Rs. 28 billion in taxes.

This significant tax burden on salaried individuals comes in the wake of the International Monetary Fund’s (IMF) recent $7 billion loan agreement with Pakistan. As part of the agreement, the government aims to increase personal and corporate income tax revenues by Rs. 357 billion this fiscal year, further intensifying the financial pressure on the salaried class.