ISLAMABAD: The Federal Board of Revenue (FBR) informed the National Assembly that the salaried class has become the third largest contributor to tax payments, with overall collections experiencing significant growth over the past three years.

The FBR has provided a written response to the enquiries posed by MNAs Syeda Shehla Raza, Muhammad Moin Aamer Pirzada, Ms Shazia Marri, and Naveed Aamir concerning tax collection from the salaried class, the tax collection target, and the expected outcomes of proposed reforms.

Finance Minister Muhammad Aurangzeb said that among the top four income classes, salaried people rank as the third most significant contributor to revenue collection. However, he noted that salary income is subject to a lower tax rate. The maximum tax rate for individuals earning a salary stands at 35pc, whereas the highest rate for other individuals reaches 45pc, the minister said in a written reply.

The minister presented data regarding tax collection from the salaried class, which amounted to Rs188 billion in FY22 and increased to Rs368bn in FY24, indicating a growth of 95.74pc. Revenue collection increased, with contributions observed from government and private sector employees throughout the year under review.

In FY22, the number of government employees stood at 331,411, resulting in a tax contribution of Rs43bn. By FY24, this figure rose to 526,056 employees, leading to a total tax contribution of Rs88bn. The data indicates an increase of 58.73pc in salaried taxpayers over the last three years, alongside a notable rise of 104.65pc in tax contributions from government employees.

Similarly, the private sector workforce in FY22 was recorded at 1.038 million, leading to a tax contribution of Rs145bn. By FY24, the number of employees increased to 1.590 million, resulting in a total tax contribution of Rs280bn. The data reveals a 53.18pc increase in salaried taxpayers over the past three years and a significant 93.11pc rise in tax contributions from private sector employees.

Published in Dawn, April 11th, 2025