The salaried class has once again proven to be the backbone of Pakistan’s tax system, emerging as the highest contributor to income tax revenue in the first quarter of the fiscal year 2025–26. According to official data from the Federal Board of Revenue (FBR), salaried individuals collectively paid Rs130 billion in income taxes between July and September 2025 marking an 18% increase compared to the Rs110 billion collected during the same period last year.
This notable rise of Rs20 billion reflects the growing burden on the country’s fixed-income earners, who continue to shoulder a significant share of Pakistan’s direct tax revenue. For the previous fiscal year (FY25), the salaried class contributed a total of Rs553 billion, highlighting their consistent role in sustaining national finances.
Overall, FBR reported a 12.5% growth in tax revenues during Q1 FY26. The breakdown includes an 11% rise in income tax, 13% in sales tax, 26% in federal excise duty, and 13% in customs duty. However, despite these gains, total revenue fell short by over Rs200 billion, with an additional Rs70 billion in losses blamed on the severe flooding that disrupted economic activity earlier this year.
At the World Bank Annual Meeting held in Washington, DC, Pakistan’s revenue transformation efforts were showcased as a global case study. Finance Minister Muhammad Aurangzeb emphasized the government’s commitment to “homegrown reforms” focusing on people, processes, and technology under the guidance of Prime Minister Shehbaz Sharif. The session was attended by FBR Chairman Rashid Mahmood Langrial and senior officials.
Aurangzeb also highlighted early successes in revenue administration and macroeconomic indicators, describing them as the foundation for long-term economic stability. However, the continued over-reliance on the salaried class for tax revenue raises concerns about fairness and the need for broader tax reforms to bring untaxed sectors into the fold.
