The grade paid staggering RS331 billion income tax in the eight months of current fiscal policy, which is 1,350% more than the taxes payable by retailers, but still not enough for the government to seek relief from the International Monetary Fund (IMF) for marginalized segment.

The total income tax contributions from the employees during the July-February period during this financial year were RS120 billion or 56% higher than RS211 billion collected in the same period in the last financial year.

The government of Prime Minister Shehbaz Sharif had targeted the collection of RS75 billion further from the paid class for the full financial year 2024-25. The figure is already RS120 billion higher and is still four months back at the end of the financial year.

In the last year, the grade RS368 billion paid in taxes. But despite this backbreaking burden for the employees who pay taxes on gross income without adjusting the expenses, the government did not take the question of reducing this burden with the IMF during the newly held lectures.

There were no discussions with the IMF about lowering the payroll class of the payroll, the sources say. When he was contacted, FBR spokesman Dr. Najeeb Memon that the government would review the tax on the payroll class in the upcoming budgetary exercise.

Unlike the RS331 billion paid by the employees, the retailers contributed, mostly, unregistered, just RS23 billion due to retention of income tax on their purchase. The tax paid by the merchants under section 236-H was 1,350% less than the taxes that the paid paid.

Wholesalers and distributors also paid retention tax of RS16 billion in eight months, and ironically, but almost half of them were unregistered with FBR, the sources said.

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.

The increase in the rate helped collect RS12 billion more from the traders, but the intended goal could not be achieved. The traders transferred the cost of the extra tax to the end consumers.

The Government’s Tajir Dost scheme to bring in 10 million dealers into the web also failed poorly, and it has now stopped talking about it. The government had to collect RS50 billion from the retailers under the scheme, but it ended up collecting peanuts.

The sources said FBR admitted before the IMF that the traders and the jewels were the two hard nuts to crack. FBR also confessed to the IMF that the Tajir Dost scheme due to major design errors had failed.

The IMF was informed that the big dealers also prevented the smaller ones from joining the scheme and as a result it could not extend the scheme to 43 cities. The FBR’s plan to bring at least 10 million retailers into the grid had flop, the IMF was told.

The sources said that Finance Minister Muhammad Aurangzeb had asked FBR to begin the exercise to undergo the wage -class taxation with a goal of giving some relief. However, no such discussions took place with the IMF.

Last June, the government increased massive tax burden for the employees by reducing the number of plates that put abnormal burden on the middle and upper middle -income groups. The maximum 35% rate is now unfairly charged to RS500,000 monthly income, and a 10% supplement is also charged, which takes the total tax rate to 38.5% for the highest plate.

Where the government did not feel the pain of the paid persons, it tried to negotiate with the IMF to reduce tax burden on the property sector. The IMF did not accept the government’s demands and has so far kept the rates unchanged.

The details showed that non-commercial sector employees paid RS141 billion income tax this year, which is higher with RS42 billion or 43%. The company’s employees paid RS101 billion in income tax, also higher with RS37 billion or 56%.

The provincial government’s employees paid RS57 billion, OP RS28 billion or 96%. The federal government employees paid RS34 billion, again higher with RS14 billion or 66%.

For the current financial year, the IMF has given RS12.97 trillion tax targets to FBR, which has already maintained the RS605 billion losses of eight months despite the collected RS331 billion from the employees.

For the month of March, the tax target is RS1,220 trillion, which FBR will again miss a wide margin. Until Sunday, FBR had raised RS515 billion, leaving it with a gigantic task of generating RS704 billion this week. Friday will be the last working day before Eid -holidays.