Salaried class’s tax payment increased by 10.2 percent

LAHORE: In the first quarter of the current fiscal year, the salaried class remained prominent in tax payments, which deposited a total of Rs 144 billion in income tax to the national exchequer.

According to FBR sources, the tax payments of the salaried class increased by Rs 13.4 billion compared to the same period of the previous fiscal year. Thus, a 10.2 percent growth was recorded in the collection on an annual basis.

On the other hand, the total income tax collection from the wholesale and retail sectors was Rs 18.4 billion. Wholesalers paid Rs 6.2 billion, which is 10 percent less than last year, while retailers paid Rs 11.3 billion.

The income tax collected from the real estate sector also decreased. According to sources, Rs 35.2 billion was collected from this sector in the first quarter, which is 38 percent less than last year.

The government is citing the reduction in the advance income tax rate on property transactions as a major reason for the decline. The tax rate on sales was reduced from 5.5 percent to 2.75 percent, while the rate on purchases was reduced from 2.5 percent to 1.25 percent.

According to the data, the advance tax collection from property sales was Rs23 billion after a 42 percent decline. The amount received from purchases also declined by 31 percent to Rs12.2 billion.

The available data shows that the tax payment of the salaried class was significantly higher than the total collection from wholesale, retail, and real estate.

According to FBR sources, before the IMF program, the salaried class used to collect about Rs391 billion in tax annually, which increased to Rs629 billion after the two-year program.

The government had announced a relief of Rs52 billion for the salaried class in the budget and a reduction in tax rates of up to 3 percent. Despite this, the latest figures have recorded an increase in tax collection from this class.