ISLAMABAD: A sharp increase in tax rates has resulted in the salaried class contributing over three times more in taxes compared to exporters during the first half of the ongoing fiscal year, as reported by The News.
According to data from the Federal Board of Revenue (FBR), salaried individuals paid Rs243 billion in taxes from July to December of the current fiscal year, up from Rs157 billion in the same period last year. This amount surpasses the combined tax contribution of both exporters and retailers during the same timeframe.
In response to the International Monetary Fund’s (IMF) requirements, the government revised tax slabs for salaried individuals, particularly those earning between Rs0.5 to Rs1 million per month. With the current trajectory, it is projected that by June 30, 2025, salaried taxpayers will contribute a record-breaking Rs500 billion to the national treasury.
In contrast, exporters—whose tax rate was increased from 1% to 2% under the IMF’s $7 billion Extended Fund Facility (EFF)—contributed Rs80 billion in the first half of FY25, compared to Rs40 billion in the same period last year when the tax rate was lower. Despite earning in foreign exchange, their contribution remains significantly lower than that of salaried individuals.
The FBR also reported challenges in implementing the much-publicized Tajir Dost Scheme (TDS) for retailers. However, increased revenue was generated under Sections 236G and 236H of the Income Tax Ordinance. Section 236G imposes a 2% tax on sales to distributors, dealers, and wholesalers (excluding fertilizers), while Section 236H enforces a 2.5% tax on sales to retailers who remain outside the tax net, compelling non-filers to comply.
The FBR faces an ambitious tax collection target of Rs12,970 billion for the current fiscal year but is already grappling with a shortfall of Rs384 billion in the first six months, with further deficits expected in January 2025.
