Salaried class emerges as top income tax contributor in Q1 of FY 2025-26

ISLAMABAD: The salaried class has once again become the leading contributor to income tax revenue in the first quarter of the current fiscal year (FY 2025-26), showing a significant increase compared to the past year, ARY News reported on Tuesday, citing sources from the Federal Board of Revenue (FBR).

According to FBR sources, salaried individuals contributed Rs130 billion in taxes from July to September 2025—an increase of Rs20 billion compared to the same period last year.

In the first quarter of the previous fiscal year, the salaried class had paid Rs110 billion in income tax, while the total contribution for the entire year stood at Rs553 billion.

Sources further revealed that income tax collection from the salaried group recorded 18% increase during the first quarter of the current fiscal year.

However, despite this growth, the overall revenue collection for the first quarter faced a shortfall exceeding Rs200 billion. Additionally, tax losses estimated at Rs70 billion due to recent flooding.

The FBR recorded an overall revenue growth of just 12.5% during the first quarter, with income tax collections rising by 11% year-on-year. Sales tax revenue increased by 13%, while federal excise duty and customs duty collections rose by 26% and 13% respectively.

Earlier, the World Bank invited FBR to showcase its successful transformation efforts as a global case study in public sector reform during the World Bank Annual Meeting held in Washington, D.C..

Federal Minister for Finance and Revenue Mr. Muhammad Aurangzeb, Chairman FBR Mr. Rashid Mahmood Langrial, Secretary Finance, Secretary Economic Affairs Division and other senior officials attended the Annual Meeting.

The Federal Minister for Finance and Revenue highlighted how Pakistan has successfully executed one of its most ambitious institutional transformations in its recent history, rebuilding its tax system across people, processes, and technology under the direct guidance and ownership of the Prime Minister of Pakistan.

He underscored that the transformation plan is homegrown, encompasses all critical areas of reforms and enjoys full support of the Prime Minister and the Federal Cabinet.

The plan is already delivering clear early wins and visible markers of turnaround of revenue administration, the Minister said.

The Minister emphasized that these reforms, while already contributing to visible improvement in macroeconomic indicators along with revenue administration reforms, will lay the foundation for sustained and long-term economic growth.