Pakistan Income tax contributions by the salaried class surged by 10% to Rs315 billion during the first seven months of the fiscal year, as reported by the Federal Board of Revenue (FBR). This increase of Rs30 billion over the previous year’s Rs285 billion highlights the growing tax burden on the salaried individuals, both in public and private sectors.
The salaried class has been paying more than double the taxes compared to the real estate sector. The Rs315 billion collected excludes book adjustments and contributions from certain contractual employees under Section 153-B of the income tax law. This heavy taxation has led to a significant exodus of skilled workers seeking better opportunities abroad.
In 2025, 762,000 Pakistanis left the country, with 254,180 being skilled, highly skilled, or highly qualified individuals, according to the Bureau of Immigration and Overseas Employment. The government argues that skilled workers remain, citing $4-5 billion earned from IT exports annually, but the high tax rates continue to drive many away.
The government has attempted to broaden the tax base but faced challenges, including external pressures that led to policy rollbacks. Despite reducing the income tax rate for those earning Rs100,000 per month, the government cannot lower rates for high earners due to International Monetary Fund (IMF) constraints.
The situation poses significant challenges for Pakistan’s economic stability, as remittances from overseas Pakistanis remain a crucial lifeline. With exports declining by 7% and foreign direct investment dropping by 47%, the pressure on the government to find sustainable solutions is mounting. The FBR’s increased property valuations in Islamabad further complicate the economic landscape.
Published in SouthAsianDesk, February 6th, 2026
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