- Web Desk
- 1 Hour ago
Salaried class pay more tax than exporters, retailers
- Web Desk
- Jul 26, 2023
ISLAMABAD: Pakistan’s salaried class paid Rs264.3 billion in income tax in the just-ended fiscal year – a sum that is nearly 200% more than the combined taxes paid by the country’s exporters and highly undertaxed retailers.
Data compiled by the Federal Board of Revenue (FBR) showed that during the fiscal year 2022-23, salaried persons paid Rs264.3 billion in taxes. The amount paid by the salaried class in taxes at up to a 35% rate was over Rs75 billion or 40% higher than the preceding year.
The salaried people were the fourth-largest contributors to the withholding taxes after contractors, bank depositors, and importers. The FBR has not yet officially released these figures, according to a report published in The Express Tribune.
In the last budget, the government had increased the taxes of the salaried class, which also became a reason for higher tax collection. Despite heavy taxation of the salaried class, coupled with history’s record highest inflation, the government again increased taxes on the salaried people earning more than Rs200,000 a month in this budget. Meanwhile, around 5,000 retailers were let off the hook by relaxing their registration conditions.
During the last fiscal year, the FBR collected over Rs2 trillion on account of withholding taxes, which were equal to 61% of the total income tax that the FBR generated in the previous fiscal year. However, the details suggested that the withholding tax collection, particularly at double rates from the non-filers of the returns, has become an easy source of revenue collection for the FBR.
However, exporters and retailers combined pay Rs175 billion less tax than the salaried class, according to the provisional numbers. The total income tax paid by exporters and retailers was Rs89.5 billion in the last fiscal year, which was Rs175 billion or 196% less than the income tax paid by salaried persons.