Salaried class contributes Rs368bn to become third-largest taxpayer in FY24

• Contracts contribute Rs496 billion to revenue collection in FY2024.
• Taxes collected on bank profits, securities surge 52.8% to Rs489bn.
• Tax revenue from telephone bills grew by 14.3% to nearly Rs100bn.

ISLAMABAD: The salaried segment in Pakistan became the third-largest contributor to the total tax revenues by paying a staggering Rs368 billion during the fiscal year 2023-24 (FY24), up 39.3% from Rs103.74 billion in FY2023, official data revealed on Tuesday.

According to the data published by the Federal Board of Revenue (FBR) on its website, contracts were among the top contributors to revenue collection in the year under review, accounting for Rs496 billion — up over R106 billion from the previous year.

Moreover, taxes collected on bank profits and securities surged 52.8% to Rs489 billion, while tax collection on dividends shot up by a whopping 70% year-on-year to Rs145 billion — in line with a boost in the profitability of the corporate sector.

The energy sector posted a 30% jump in tax collection on electricity bills, amounting to Rs124 billion, while property transactions added Rs104 billion collected from purchases and Rs95 billion from sales.

Tax revenue from telephone bills grew by 14.3% to nearly Rs100 billion. On the other hand, the export sector showed a 27.2% increase, contributing Rs94 billion.

According to the FBR document, other tax streams included technical fees, cash withdrawals, commissions, and retailer contributions.

The FBR faced a significant tax shortfall of Rs386 billion in the first half of this fiscal year (July-December). The revenue collection stood at Rs5,623 billion, falling short of the desired target of Rs6,009 billion.

It must be noted that the IMF has given an indicative target of Rs6,009 bn till the end of December 2024, but the FBR managed a net collection of Rs5,623 billion during the first six months of the current fiscal year (CFY).

It is yet to be ascertained how much the FBR collected through advance collection because there were projections that it would face a shortfall of over Rs400 billion in the first half of the current fiscal year.

One top official of the FBR contended that the net revenue collection improved till receiving the latest figures as the collection went up to Rs5,623 billion against the assigned target of Rs6,009 billion agreed with the IMF. It remains to be seen how the international lender will respond when its review mission visits Pakistan, probably in the second week of February.

Pakistan and the IMF had agreed that if the revenue shortfall exceeds 2% against the assigned target, then contingency measures would be announced to bridge it. They may discuss a reduction in the tax collection target as desired by Islamabad, but the IMF may pursue additional taxation measures to achieve the desired tax collection target of Rs12,970 billion by June 30, 2025.

Adviser to the finance minister Khurram Schehezad said FBR tax collection for the month of Dec 24 clocked in at Rs1,328 billion, achieving 97pc of the monthly target. He added that collection for Dec 24 is also the highest in a single month.