Salaried individuals paid a record-breaking Rs556 billion in withholding income tax during fiscal year 2024–25, according to official data released by the Federal Board of Revenue (FBR). The figure marks a 53% increase compared to Rs363 billion collected in the previous year, underscoring the growing reliance on the salaried class for national tax revenues.
The sharp rise in collections was largely driven by private sector employees, who contributed Rs402 billion—up 46% from Rs275 billion in FY24. The surge reflects a combination of improved salary levels and tighter enforcement of tax compliance.
Public sector employees also saw a notable rise in tax contributions. Federal government employees paid Rs54.12 billion in income tax, up from Rs36.95 billion last year. Meanwhile, employees of provincial governments nearly doubled their contributions, paying Rs99.52 billion compared to Rs50.32 billion in the previous fiscal year—a staggering 98% increase.
Tax analysts say the data points to a structural imbalance in the tax system. “The salaried class remains the most transparent and easy to tax due to automated payroll deductions, while other sectors, including traders and self-employed professionals, continue to under-contribute,” one expert noted.
The FBR figures have once again sparked calls for broadening the tax net and addressing inequities in the system. Despite record payments by wage earners, a large portion of the economy remains outside the formal tax regime, raising concerns about fairness and sustainability in revenue collection.
