The Federal Board of Revenue (FBR) has released provisional data showing that Pakistan's salaried class paid Rs633 billion in income tax during the 2025-26 fiscal year, making it the largest source of income tax revenue. This amount exceeds the combined contributions of exporters, the retail sector, and the real estate sector.
Overall Tax Collection Falls Short of Target
The FBR provisionally collected Rs13.01 trillion in taxes for the fiscal year ending June 30, 2026, falling short of the annual target of Rs15.264 trillion. Despite this shortfall, income tax deducted at source from salaried employees remained a reliable revenue stream for the government.
Year-on-Year Increase in Salaried Tax Payments
Tax payments by salaried individuals rose from Rs585 billion in FY2024-25 to Rs633 billion in FY2025-26, reflecting a year-on-year increase of Rs48 billion. In contrast, exporters contributed Rs174 billion in income tax during the fiscal year, slightly down from Rs176 billion collected a year earlier.
Real Estate Sector Shows Mixed Trends
The real estate sector displayed mixed results. Tax collected from property sellers under Section 236-C increased significantly to Rs191 billion from Rs118 billion. However, collections from property buyers under Section 236-K declined to Rs87 billion from Rs120 billion. Withholding tax from retailers under Sections 236-G and 236-H rose to around Rs70 billion, compared with Rs62 billion in the previous fiscal year. Under Section 236-G, collections reached Rs25 billion, while receipts under Section 236-H increased to Rs45 billion.
Government Announces Relief Measures
Tax authorities expect recently announced relief measures to stimulate economic activity and improve revenue performance in the current fiscal year. These measures include lower tax rates for salaried individuals, reduced taxation for exporters, and rationalized taxes on real estate transactions.
FBR Introduces New Operating Model
The FBR is also introducing a new operating model for the Inland Revenue Service (IRS), aimed at increasing transparency and compliance. The model reduces direct interaction between taxpayers and tax officials through the use of technology and artificial intelligence.
