Salaried Class Emerges as Third-Largest Taxpayer in FY24
The salaried class in Pakistan made a significant contribution to tax revenue in FY24, paying Rs368 billion—a 39.3% increase from Rs103.74 billion in FY23. This achievement places the salaried segment as the third-largest contributor to the country’s total tax revenue, according to data from the Federal Board of Revenue (FBR).
Key Highlights of FY24 Tax Revenue
Contracts: The Largest Revenue Contributor
Contracts led tax contributions, generating Rs496 billion, an impressive increase of over Rs106 billion from the previous year.
Bank Profits and Securities: Major Growth
Taxes on bank profits and securities surged 52.8%, reaching Rs489 billion. Similarly, taxes on dividends rose by 70% year-on-year to Rs145 billion, driven by robust corporate sector profitability.
Energy and Property Sectors Show Strong Performance
Tax collection from electricity bills grew by 30%, totaling Rs124 billion. Meanwhile, the property sector added Rs104 billion from purchases and Rs95 billion from sales, contributing significantly to overall revenue.
Telecommunication Sector Growth
Taxes from telephone bills increased by 14.3%, amounting to nearly Rs100 billion.
Export Sector Contributions
The export sector displayed a 27.2% growth in tax revenue, contributing Rs94 billion to the national exchequer.
Other Revenue Streams
Additional sources of revenue included technical fees, cash withdrawals, commissions, and retailer contributions, further diversifying the tax base.
FBR Faces Revenue Shortfall in FY24
Despite these positive trends, the FBR encountered a significant revenue shortfall of Rs386 billion during the first half of FY24 (July-December). Total revenue collection stood at Rs5,623 billion, falling short of the target of Rs6,009 billion set under the International Monetary Fund (IMF) agreement.
The IMF has stipulated that any revenue shortfall exceeding 2% of the target will require contingency measures. This could lead to additional taxation to achieve the annual revenue target of Rs12,970 billion by June 30, 2025.
December 2024: Record Monthly Collection
In December 2024, the FBR achieved Rs1,328 billion in tax revenue, meeting 97% of the monthly target. This represents the highest-ever collection in a single month, as noted by Khurram Schehezad, Adviser to the Finance Minister.
Future Outlook
The IMF’s review mission is scheduled to visit Pakistan in February to evaluate the progress on fiscal targets. While Pakistan may seek a reduction in the annual tax collection target, the IMF is expected to propose additional measures to ensure compliance with agreed benchmarks.
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