ISLAMABAD – Pakistan’s salaried class paid Rs144 billion in income tax during the first quarter of the current fiscal year 2026-27, significantly exceeding the combined tax contribution of the retail and real estate sectors.
According to preliminary Federal Board of Revenue data, income tax collection from the real estate sector dropped by 38% during July-September, falling to Rs35.2 billion from nearly Rs57 billion recorded during the same period last year.
The decline followed a reduction in advance tax rates on property transactions. The rate on property sales was reduced from 5.5% to 2.75%, while the rate on purchases was cut from 2.5% to 1.25%.
As a result, tax collected on property sales fell from Rs39.5 billion to Rs23 billion, while revenue from property purchases declined from Rs17.7 billion to Rs12.2 billion.
Meanwhile, withholding tax collection from the wholesale and retail sectors remained broadly stable. The two sectors together contributed Rs18.4 billion during the first quarter, representing an increase of just 1.3% from the previous year.
Wholesale-sector collections stood at Rs6.2 billion, down Rs701 million year-on-year, while retail collections reached Rs11.3 billion, an increase of Rs945 million or 8.3%.
Overall, the retail and real estate sectors contributed around Rs54 billion in income tax during the quarter, compared with Rs144 billion paid by salaried taxpayers. The difference between the two stood at approximately Rs90 billion.
Tax authorities said income tax collected from salaried individuals increased by Rs13.4 billion, or 10.2%, compared with the corresponding period last year.
The government had announced tax relief of around Rs52 billion for salaried taxpayers in the current fiscal year’s budget, including a reduction in tax rates of up to three percentage points, removal of a 9% surcharge and an increase in the annual income threshold for the maximum 35% tax rate from Rs4.1 million to Rs7 million.
FBR data also indicates that annual tax payments by salaried taxpayers increased from Rs391 billion before the IMF programme began to Rs629 billion by June of the current year.
The government has also introduced a fixed-tax scheme aimed at bringing traders into the formal tax system.
