- The rates of salaried class slabs were revised upwards at the request of the IMF.
- FBR collects Rs 367 billion from the salaried class in the last financial year.
- The board faces a mammoth task of collecting Rs12.97 trillion in FY25.
Islamabad: A significant increase in tax rates has led to the salaried class contributing over 300% more taxes than exporters during the first half of the current financial year, The news reported.
The FBR collected Rs 243 billion in the first half of the current financial year as against a collection of Rs 157 billion during the same period of the financial year during the salaried class.
Even with the combined contribution of exporters and retailers, the salaried class paid more income tax in the first six months (July-Dec) of the current financial year.
On the request of the International Monetary Fund (IMF), the salary class slab rates have been revised upwards, especially for those drawing more than Rs0.5 to Rs1 million per month salary.
Keeping in mind the existing pace, this would be the first exercise in the history of Pakistan when the government was going to force the salaried class to collect a tax amount of Rs 500 billion in the national kitty till June 30 2025.
The FBR collected Rs367 billion from its salaried class in the last financial year, ending June 30, 2024. Now, under the $7 billion Extended Fund Facility (EFF), the slab tax rates of higher incomes were revised to 40% which resulted in Making more of the salaried class. On the other hand, income tax of exporters was revised upwards by 1-2 per cent, resulting in tax collection of Rs 80 billion in the first half of the current fiscal year. In the same period of the previous fiscal year, exporters had paid Rs 40 billion when their tax rate was just 1%.
Official data from the Federal Board of Revenue (FBR) revealed that the salaried class paid income tax of Rs243 billion in the first half (Jul-Dec) of the current fiscal year, while exporters, who have earned in foreign exchange (US Dollars), paid only Rs 80 billion during the same period of the current financial year.
The much-hyped Tajir DOST Scheme (TDS) for retailers had failed miserably, but the FBR got an increase in revenue under section 236G and 236H from retailers in the current financial year.
Under section 236G of the Income Tax Act, on the gross amount of sale to distributors, dealers or wholesalers other than the sale of fertilizers. The FBR imposed a two percent tax.
Under Section 236 of the Income Tax Act, on the gross amount of sale to retailers, the tax rate of 2.5% would be charged to those who would prefer to stay outside the tax net . These two steps in the form of 236 g and 236H forced non-sequencers to enter net tax instead of paying an amount of tax on their gross sales amount.
The FBR faces a mammoth task of collecting Rs12.97 trillion tax for the current financial year. So far, the FBR has faced a deficit of Rs 384 billion in the first six months and they are heading towards materializing another deficit in the current month (January 2025).
The FBR collected Rs 243 billion in the first half of the current financial year as against a collection of Rs 157 billion during the same period of the financial year during the salaried class.