Key Takeaways
- Pakistan's salaried class paid Rs. 91 billion in income tax in the first two months of FY27, 225% more than the Rs. 28 billion from the property sector.
- Tax collection from the property sector fell 28% from the previous fiscal year, while the salaried class saw a 7.5% increase from the same period last year.
- The government cut property transaction taxes, leading to a significant drop in tax collection from the sector.
Pakistan's salaried class has significantly outperformed the property sector in tax contributions during the first two months of the current fiscal year, according to tax officials and FBR data.
The salaried class paid Rs. 91 billion in income tax, a 225% increase from the Rs. 28 billion collected from the property sector during the same period.
In contrast, tax collection from the property sector fell 28% from Rs. 39.4 billion recorded in the first two months of the previous fiscal year.
The government's recent budget cuts to advance taxes on property transactions by 50% have contributed to the decline in property tax collection, with the tax rate on property sales reduced to 2.75% from 5.5%.
The tax rate on property purchases was also cut to 1.25% from 2.5%, resulting in a drop in advance income tax collected on property sales to Rs. 18.4 billion from Rs. 27 billion.
Tax collection on property purchases fell to Rs. 9.7 billion from Rs. 12.4 billion, a decrease of Rs. 2.7 billion, or 22%.
Despite the tax relief provided to salaried individuals, the gap between their tax contributions and those from the property sector remains wide.
The salaried class paid Rs. 79 billion, or 658%, more income tax than retailers and wholesalers, who together paid Rs. 12 billion in withholding taxes during the period.
FBR's overall tax collection also showed signs of weakness, missing its August target by Rs. 27 billion and showing almost no growth during the month.
