Pakistan’s salaried class paid Rs. 91 billion in income tax during the first two months of the current fiscal year, 225 percent more than the Rs. 28 billion collected from the real estate sector, according to tax officials and FBR data.
Income tax collection from salaried individuals rose Rs. 6.3 billion, or 7.5 percent, from the same period last year. In contrast, tax collection from the real estate sector fell 28 percent from Rs. 39.4 billion recorded in the first two months of the previous fiscal year.
The gap widened after the government cut advance taxes on property transactions by 50 percent in the latest budget. The tax rate on property sales was reduced to 2.75 percent from 5.5 percent, while the rate on property purchases was cut to 1.25 percent from 2.5 percent.
As a result, advance income tax collected on property sales dropped to Rs. 18.4 billion from Rs. 27 billion, a decline of Rs. 8.6 billion, or 32 percent. Tax collection on property purchases fell to Rs. 9.7 billion from Rs. 12.4 billion, down Rs. 2.7 billion, or 22 percent.
The government had also provided Rs. 52 billion in tax relief to salaried individuals in the budget by cutting tax rates by up to 3 percent, abolishing the 9 percent surcharge linked to the highest tax rate and raising the annual income threshold for the 35 percent tax rate from Rs. 4.1 million to Rs. 7 million.
Despite the relief, the salaried class continued to contribute significantly more in taxes than the property sector. The gap was also much wider compared with retailers and wholesalers, who together paid Rs. 12 billion in withholding taxes during the period, down Rs. 440 million, or 3.5 percent, from a year earlier.
The salaried class therefore paid Rs. 79 billion, or 658 percent, more income tax than retailers and wholesalers during the first two months of the fiscal year.
The data comes as FBR’s overall tax collection also showed signs of weakness. The tax authority missed its August target by Rs. 27 billion, with collection showing almost no growth during the month.
Prime Minister Shehbaz Sharif recently told industrialists that the government had recovered Rs. 800 billion through enforcement during the previous fiscal year without imposing new taxes. However, the claim could not be independently verified.
FBR collected Rs. 13.01 trillion during the previous fiscal year, up Rs. 1.26 trillion, or around 11 percent, from the preceding year. Tax collection grew broadly in line with nominal GDP growth of 10.8 percent, while the tax-to-GDP ratio remained unchanged at 10.3 percent.
The government had also introduced Rs. 312 billion in additional tax measures in June 2025, while FBR has since expanded digitization, faceless processes, production monitoring and enforcement measures to improve tax collection.
