Pakistan’s salaried class faces a 55% tax hike in 2025-26, with collections reaching Pak Rs. 570 billion. PM Shehbaz pledges relief amid economic challenges.
The federal government is expected to impose additional tax burdens on salaried individuals, with total tax collection from this segment projected to reach Pak Rs. 570 billion in the 2025-26 fiscal year, marking a 55% increase from the previous year. According to the Federal Board of Revenue (FBR), salaried individuals contributed Pak Rs. 368 billion in taxes last year. In the first six months of the current fiscal year alone, Pak Rs. 243 billion has already been collected.
A report highlights a sharp increase in tax contributions by salaried workers, with a 300% rise in the first half of this fiscal year compared to the same period last year. Five years ago, the annual tax collection from salaried individuals stood at Pak Rs. 129 billion, steadily increasing over time:
2019-20: Pak Rs. 129 billion
2020-21: Pak Rs. 152 billion
2021-22: Pak Rs. 189 billion
2022-23: Pak Rs. 264 billion
With these rising figures, the salaried class has now become the third-largest taxpaying segment in the country. The potential tax increase is likely to fuel concerns among salaried workers already grappling with inflation and economic challenges.
Prime Minister Shehbaz Sharif acknowledged the resilience and dedication of the salaried class, commending them for bearing a significant tax burden amid the stringent conditions imposed by the International Monetary Fund (IMF). Speaking at an event marking Youm-e-Tameer-o-Taraqqi, he highlighted their crucial role in stabilizing the economy.
PM Shehbaz emphasized that the salaried class had shouldered the highest tax contributions, collectively paying Pak Rs. 300 billion. Expressing gratitude for their sacrifices, he assured that the government remained committed to easing their financial burden while ensuring long-term economic stability. He stated that after a year of relentless efforts by the government’s economic team, the economy was poised for a significant turnaround. He credited the financial sector’s recovery and stated that Pakistan had successfully transitioned from economic turmoil to stability due to a collaborative effort between the government and stakeholders.
The prime minister underscored the importance of securing the $7 billion, three-year financial package from the IMF in September 2024, preventing the country from defaulting. He acknowledged that while the IMF conditions were stringent, they were necessary for economic stabilization. Additionally, he highlighted a substantial decrease in the inflation rate, which dropped from 40% to 2.4% in January 2025. He encouraged the business community to play a proactive role in economic stability and reaffirmed the government’s commitment to engaging them in policymaking.
PM Shehbaz also emphasized the government’s crackdown on cross-border smuggling, citing the legal export of sugar to Afghanistan, which generated $211 million in foreign exchange. He praised the Pakistan Army and law enforcement agencies for their efforts in controlling illicit trade. Addressing privatization, he reiterated the government’s determination to minimize state involvement in business activities and promote efficiency and competitiveness.
On national security, PM Shehbaz blamed the previous administration’s mismanagement for the resurgence of terrorism, asserting that economic growth and national progress could not be achieved without eradicating terrorism. He called for unity and cooperation among all sectors of society to ensure peace, stability, and economic progress. Expressing optimism about the “Uraan Pakistan” program, he said it would enhance economic productivity and export potential.
Finance Minister Muhammad Aurangzeb reaffirmed the government’s success in curbing inflation and lowering the policy rate to 12%, reducing the debt burden. He noted that, for the first time, Pakistan was undergoing rigorous structural and pension reforms.
Planning Minister Professor Ahsan Iqbal emphasized the importance of policy continuity, stating that under the “Uraan Pakistan” initiative, the country aimed to reach an export target of $100 billion within five years. He proposed exempting export-led industries from national holidays to maximize output.
Information Minister Attaullah Tarar commended PM Shehbaz for prioritizing the nation’s interests over political gains and recognized the business community’s role in economic development.
President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Atif Ikram Sheikh, also addressed the gathering, expressing confidence in the government’s commitment to economic reforms.