The Federal Board of Revenue (FBR) collected PKR 605.593 billion in withholding taxes from the salaried class during FY2024-25, marking a significant 54.7% increase compared to PKR 391.362 billion collected in FY2023-24.
According to the FBR report, withholding taxes accounted for 59% of total direct taxes in FY2024-25, compared to 60% in the previous fiscal year.
Under the category of contracts, the FBR collected PKR 737.715 billion in FY2024-25, showing a 39% increase from PKR 530.724 billion last year. From electricity bills, withholding tax collection rose to PKR 144.371 billion, an 11.2% increase compared to PKR 129.815 billion in FY2023-24.
The report highlights that the largest increase came from withholding taxes deducted from salaries, which rose by PKR 214.2 billion (55%). This surge is attributed mainly to the reduction in the number of tax slabs and the increase in tax rates within each slab. As a result, withholding tax from salaries increased from PKR 391.4 billion in FY2023-24 to PKR 605.6 billion in FY2024-25. Significant increases were also recorded under contracts, imports, telephone services, and exports.
The report states that 71.1% of total withholding tax revenue came from a few major sources. Overall, withholding taxes contributed 59% to total income tax collection in FY2024-25, slightly down from 60% in the previous year.
Total withholding tax collection reached PKR 3,381.5 billion in FY2024-25, reflecting a 23.5% increase from PKR 2,739.1 billion in FY2023-24.
It further notes that the top 15 revenue-generating withholding tax categories remained largely the same as last year, with the exception that salary-based withholding tax moved up to the second-highest position. Out of the 15 major categories, 14 recorded positive growth, while only tax collected from bank profits and securities showed a slight 1.6% decline.
