Salaried Individuals Dominate National Tax Collection for Direct Taxes

Strategic Insights -

Salaried individuals have surpassed exporters and retailers in contributing to the national tax collection for direct taxes, as per a recent news report. The Federal Board of Revenue (FBR) collected a record Rs545 billion in income tax from salaried individuals in FY2024-25, exceeding the combined tax collected from exporters and retailers. The salaried class's contribution was over three times higher than that of exporters and eight times more than retailers. This significant increase is a result of the FBR's enforcement actions and tax relief measures, including the reduction of tax rates for the first two income slabs for the salaried class.

Key Takeaways:

  • The salaried class contributed Rs545 billion in income tax to the national tax collection for direct taxes in FY2024-25, making them the highest contributors.
  • The contribution from the salaried class was over three times higher than that of exporters, who paid Rs180 billion in taxes.
  • Retailers contributed Rs62 billion in taxes, which is eight times less than the tax paid by salaried individuals.
  • The FBR collected Rs178 billion more from salaried individuals in FY25 compared to FY24, indicating a substantial increase.
  • The salaried class paid Rs545 billion in FY25, compared to Rs367 billion in FY24.
  • Exporters earned in foreign currency but paid Rs180 billion in taxes in the last fiscal year.
  • The FBR has committed to ensuring more compliance despite the failure of the Tajir Dost Scheme (TDS) for retailers.
  • New enforcement actions under Sections 236G and 236H of the Income Tax Ordinance targeted retailers, prompting non-filers to join the tax net.
  • Dr. Najeeb Memon, FBR's spokesman, mentioned that tax rates for the first two income slabs for the salaried class had been reduced, providing Rs50 billion in relief to the salaried class in the current fiscal year 2025-26.

Statistics:

  • Rs545 billion: The amount collected in income tax from salaried individuals in FY2024-25.
  • Rs180 billion: The amount of taxes paid by exporters in the last fiscal year.
  • Rs62 billion: The amount contributed in taxes by retailers.
  • Rs178 billion: The increase in tax collection from salaried individuals from July 2024 to June 2025.
  • Rs545 billion: The total amount paid by salaried individuals in FY25.
  • Rs367 billion: The amount paid by salaried individuals in FY24.
  • Rs50 billion: The estimated relief provided to the salaried class in the current fiscal year 2025-26 due to reduced tax rates.

Sources:

  • A news report.
  • Federal Board of Revenue (FBR).
  • Income Tax Ordinance.
  • Dr. Najeeb Memon, FBR's spokesman.