Islamabad:
Paid individuals have paid a staggering RS555 billion in income tax in the last financial year, which was RS188 billion more than the previous year and also 100% more than the total taxes paid by retailers and the property sector.
The record high contributions from people who pay income tax on gross salaries without having the luxury of adjusting their expenses reduced significant home -taking salaries in a larger community segment.
According to preliminary figures prepared by the Federal Board of Revenue, the employees paid RS555 billion in income tax in the financial year 2024-25. The unwilling contributions were 51% or RS188 billion more than the taxes collected from the employees in the previous financial year.
In the financial year 2023-24, the government had collected RS367 billion from the employees. Prime Minister Shehbaz Sharif government had phenomenally increased the tax burden in the employee -gone and claimed it would only generate RS75 billion in additional income taxes.
The highest contributions from the employees in a single year showed how the voiceless people have been discriminated against with the country’s powerful sectors.
Last month, the government reduced the marginal tax burden for the people who earned up to RS3.2 million annually, which it said would give them an advantage of RS56 billion. This nominal benefit of RS56 billion compared to the current contributions is like a decrease in the bucket that would not tackle the tax evil for the employees.
Despite putting tremendous burden on the employee, FBR missed his annual collection goal with a margin of around RS1.2 trillion.
The details showed that non-commercial sector employees paid RS236.5 billion income tax in the last financial year, which is higher with RS67 billion or 40%. Employees in the corporate sector paid RS165 billion in income tax, also higher with RS54.6 billion or 49%.
Employees in the provincial governments paid RS99.5 billion in taxes, which had risen by RS49 billion or 98%. The federal government employees paid RS54.2 billion, higher with RS17 billion or 45%.
The total income tax payments in the last financial year were RS5.8 trillion, and the grade paid RS1 out of each RS10 collected from all over the country below the income tax.
Unlike the RS555 billion paid by the employees, the retailers have mostly unregistered, only contributed RS38 billion due to retention of income tax on their purchase. The tax amount paid by dealers under section 236-H was 1,360% less than taxes paid by employees.
In addition, wholesalers and distributors also paid detention tax of RS25 billion in the last financial year, and almost half of them were unregistered with FBR, the sources said.
PM Sharif could not live up to his promise to charge proper taxes from the retailers. The Tajir Dost scheme could not give the desired results, and the government has not announced any new measure in the budget to bring the retailers into the taxi.
Its greatest enforcement measure to ban the economic transactions of unjustified persons has become effectively useless after the government exempted more than 90% transactions from the new law. The government has allowed the non -eligible persons, those who do not have enough declared resources to buy up to RS7 million worth of a car, RS50 million worth plot and RS100 million commercial property.
In the budget, the government had imposed 2.5% withholding tax on the traders in the hope that this would force them to enter the tax system. Although the increase in the rate helped collect RS21 billion more from the traders, the intended goal could not be achieved. The traders transferred the cost of the extra tax to the end consumers.
In the last budget, the government had also significantly increased the tax burden on the real estate sector by increasing the rates of the non-files and also introducing a new category of late files in the budget.
As a result, in the last financial year, the government collected RS237 billion on the sale and purchase of properties. This helped increase the collection by 19% compared to the previous financial year, but it was still under the brand.
The combined taxes paid by both retailers and the real estate sector were 100% less than the total contributions from the employees.
In the sale of properties, the government collected RS119 billion due to withholding taxes, which was a quarter more than the previous financial year. When purchasing the plots, the government collected another RS118 billion, also higher by 14%.
In the new budget, the government has abolished the federal excise duty in the real estate sector. The net taxes on sales and purchases remained unchanged, although the government changed a higher burden against sellers by increasing their withholding tax rates.
