FY2024: Salaried class contributes Rs368bn to become third-largest taxpayer

ISLAMABAD: Pakistan’s salaried class contribution in revenue generation has gone up by 39.3 percent in the fiscal year 2024 as the Federal Board of Revenue (FBR) fetched Rs368 billion against a collection of Rs264 billion in FY2023. In absolute figures, the salaried class contribution into national kitty went up by Rs103.7 billion just in one fiscal year. The salaried class paid more taxes than exporters, retailers and many others. The exporters paid income tax of Rs93 billion only.

In FY2023-24, the Withholding Tax (WHT) collection reached Rs2,740 billion, a significant increase from Rs2,007 billion in the previous fiscal year, marking a growth of 36.5 percent. All major WHT categories experienced positive growth. Notably, WHT from dividends saw the highest increase of approximately 69.9 percent. This was followed by substantial growth in collections from Technical Fees, Profit on Debt/Bank Interest & Securities, salaries and the sale of immovable property, which grew by 53.6, 52.8, 39.3 and 37.0 percent respectively.

The highest contributor in withholding taxes is the contract payments with an 18 percent share, followed by withholding tax on Profit on Debt/Bank Interest (18 percent), Salaries (13 percent), Dividends (5 percent) and Electricity Bills (5 percent).

The collection under Workers Welfare Fund/ Workers Profit Participation Fund and the Capital Value Tax shows a collective increase of 12.4 percent. Analysis of the income tax collection indicates that WHT accounts for 29 percent of the FBR’s total collection and represents 60 percent of the income tax collected.