According to information received from sources, salaried individuals paid Rs 266 billion in income tax during the first six months of the current fiscal year.
Provisional data from the Federal Board of Revenue (FBR) for July to December shows that income tax paid by salaried employees from both the public and private sectors was more than double the amount paid by the real estate sector during the same period. The data shows that salaried individuals paid over Rs 266 billion in income tax, which is Rs 23 billion, or 9 percent, higher than in the same period last fiscal year. This amount excludes book adjustments. Last year, income tax collections without book adjustments were Rs 243 billion.
Sources said the salaried class pays around 38 percent of its total income in taxes, which is much higher than other sectors, including real estate and retail, and also higher than in many countries in the region.
Non corporate employees paid the highest amount, Rs 117 billion, which is 14 percent higher than last year. Employees in the corporate sector paid Rs 82 billion, showing a year on year increase of 13 percent.
Meanwhile, the FBR faced serious difficulties in meeting its revised tax target of Rs 6.5 trillion. This forced the tax authority to rely on heavy advance collections and slow down the payment of taxpayer refunds. Even then, total tax collection increased by only about 10 percent, which was half the rate needed to meet the annual target.
During the first six months, the FBR collected Rs 3.03 trillion in income tax, of which about one tenth came from salaried individuals.
Provincial government employees paid Rs 39 billion in income tax, which was 7 percent lower than last year, while federal government employees paid Rs 27 billion, showing an 8 percent increase.
The new tax imposed on wealthy pensioners, applied to pensions above Rs 10 million per year, failed to generate significant revenue and is expected to bring in only around Rs 1 billion annually.
The real estate sector also faced higher taxes, including higher rates for non filers and a new category for late filers. Withholding tax on the sale of plots increased by two thirds to Rs 87 billion, while tax collection on the purchase of plots fell by 29 percent to Rs 39 billion. In the budget, the government reduced tax on the purchase of plots but increased the rate on sales.
Overall, the government collected Rs 126 billion in withholding tax from the real estate sector in the first half of the fiscal year, an increase of 17 percent.
