The salaried class has emerged as a key contributor to Pakistan’s tax revenue, with withholding tax payments soaring to Rs265.745 billion from July to December 2024-25, marking an impressive 59.2% increase compared to the same period last year, according to data from the Federal Board of Revenue (FBR).
In the first half of the 2023-24 fiscal year, salaried individuals had contributed Rs166.924 billion in withholding tax. The substantial rise in tax collection reflects increased compliance and government efforts to broaden the tax base, Business Recorder reported.
Withholding Tax Breakdown
Withholding tax from contracts—governed under Section 153 of the Income Tax Ordinance 2001—rose to Rs299.267 billion, reflecting a 25.2% increase.
Similarly, withholding tax collections from bank interest and securities (categorized under Section 151 for profit on debt) reached Rs255.352 billion, growing by 16.2%.
Tax revenue from imports also saw a 7.6% increase, reaching Rs203 billion in the first half of 2024-25, compared to Rs189.349 billion in the corresponding period last year.
Domestic Sales Tax Collection Surges
Key industries contributed significantly to domestic sales tax collection during the period:
- Electrical energy: Rs283 billion (53.5% increase)
- Cement: Rs48.275 billion (47.7% increase)
- Sugar: Rs58.957 billion (26.4% increase)
- Cotton yarn: Rs43.389 billion (37.2% increase)
- Motor cars: Rs14.848 billion
Sales Tax at Import Stage Sees Notable Growth
At the import stage, sales tax collections witnessed strong growth across various sectors:
- Photosensitive semiconductors: Rs98.732 billion (112.7% increase)
- Petroleum products (POL): Rs166 billion (12% increase)
- Machinery: Rs72 billion (19.6% increase)
- Vehicles (excluding railways): Rs61 billion
Government’s Revenue Boost Continues
The latest figures indicate robust revenue collection in the first half of FY 2024-25, with strong contributions from salaried individuals, the banking sector, imports, and key industries. The rising tax collection underscores efforts by tax authorities to enhance compliance and enforcement, strengthening the country’s fiscal position.
