Pakistan’s salaried workers have once again emerged as one of the biggest contributors to the country’s income tax collection. During the first two months of the ongoing fiscal year 2026-27, salaried individuals paid Rs. 91 billion in income tax.
This amount was 225 percent higher than the Rs. 28 billion collected from the real estate sector during the same period, according to tax officials and data from the Federal Board of Revenue (FBR).
The figures cover July and August 2026 and highlight a major difference in tax contributions between people earning regular salaries and the property sector. While salaried taxpayers continued to provide a large share of tax revenue, collections from real estate dropped sharply compared with the same period last year.
The difference has become even more noticeable after the government reduced advance taxes on property transactions in the latest federal budget. At the same time, salaried taxpayers also received some tax relief, but their overall contribution remained far higher.
Salaried Tax Collection Rises 7.5 Percent
According to the available FBR data, income tax collected from salaried individuals increased by Rs. 6.3 billion during July and August 2026.
The collection reached Rs. 91 billion compared with Rs. 84.7 billion recorded during the same two months of the previous fiscal year. This represents an increase of around 7.5 percent.
The increase shows that salaried workers are still making a strong contribution to government revenues despite changes in tax rates. Their taxes are generally deducted directly from salaries, making collection more regular and easier for the authorities to track.
For many employees, this means tax is taken from their income before they receive their monthly salary. As a result, the government can collect a large portion of this tax without relying on individuals to make separate payments.
Property Sector Tax Collection Falls Sharply
The situation was quite different in the property sector.
Income tax collection from real estate fell to Rs. 28 billion during the first two months of FY27. In the same period last year, the sector had contributed Rs. 39.4 billion.
This means the government collected around Rs. 11.2 billion less from the property sector, representing a decline of about 28 percent.
The fall in property-related tax collection came after major changes were introduced in the tax rates on property transactions.
The government lowered advance tax rates on property sales and purchases by around half. The rate on property sales was reduced from 5.5 percent to 2.75 percent, while the rate on property purchases was brought down from 2.5 percent to 1.25 percent.
These changes were introduced to encourage activity in the real estate and construction markets. However, one immediate result has been a lower amount of tax collected from property transactions.
Property Sales Generate Less Tax
The impact of the lower tax rates can be seen clearly in the figures for property sales.
Advance income tax collected from property sales fell to Rs. 18.4 billion in July and August 2026. During the corresponding period of the previous fiscal year, the collection stood at Rs. 27 billion.
This represents a decline of Rs. 8.6 billion, or around 32 percent.
The reduction shows how changes in tax rates can quickly affect government revenue. Even when property transactions continue to take place, a lower tax rate means the government receives less money from each transaction.
The government introduced these changes as part of wider efforts to support construction and property-related activity. The real estate sector has repeatedly called for lower taxes, arguing that high transaction costs can discourage buyers and investors.
Tax on Property Purchases Also Drops
Tax collection from property purchases also recorded a noticeable decline.
The government collected Rs. 9.7 billion in advance tax from property purchases during the first two months of FY27. This was down from Rs. 12.4 billion collected during the same period last year.
The decrease was Rs. 2.7 billion, equal to roughly 22 percent.
Together, the lower collections from property purchases and sales explain a large part of the fall in overall real estate tax revenue.
As a result, the difference between the taxes paid by salaried workers and the property sector became much wider.
Salaried People Still Paid More Despite Tax Relief
Another important point is that salaried taxpayers also received relief under the FY27 budget.
The government provided around Rs. 52 billion in tax relief to salaried individuals. Income tax rates were reduced by up to 3 percentage points for different income groups.
The government also removed the 9 percent surcharge linked to the highest tax rate. In addition, the annual income level at which the 35 percent tax rate applies was increased from Rs. 4.1 million to Rs. 7 million.
These changes were aimed at reducing the tax burden on employees, especially middle- and higher-income salaried people.
Even after these measures, however, salaried individuals continued to pay much more than the property sector.
This is an important feature of Pakistan’s tax system because salaried employees are among the easiest taxpayers for the government to identify and collect taxes from.
The Difference Is Also Large With Retailers and Wholesalers
The gap is not limited to the property sector.
Retailers and wholesalers together paid around Rs. 12 billion in withholding taxes during the first two months of FY27. Their combined contribution declined by Rs. 440 million, or around 3.5 percent, compared with the same period last year.
By comparison, salaried individuals paid Rs. 91 billion.
This means the salaried class contributed Rs. 79 billion more than retailers and wholesalers during the period. The difference was around 658 percent.
The figures once again raise questions about how evenly the tax burden is spread across different parts of the economy.
Employees with documented incomes are often easier to tax because their salaries are recorded and taxes can be deducted at source. Other sectors, especially those where transactions are less documented, can be harder to bring fully into the tax net.
A Bigger Tax Collection Challenge for FBR
The latest figures come at a time when the FBR itself is facing challenges in meeting its collection targets.
The tax authority reportedly missed its August revenue target by Rs. 27 billion. Tax collection during the month showed almost no growth, adding to concerns about the government’s ability to achieve its overall revenue goals.
A strong tax collection system is important for Pakistan because the government needs revenue to meet spending requirements, repay debt, support public services and manage its wider economic needs.
When collection from major sectors falls below expectations, the pressure can increase on those parts of the economy where taxes are already being collected effectively.
This is one reason the growing gap between salaried taxpayers and other sectors has attracted attention.
Pakistan Wants to Improve Tax Enforcement
The government has been taking several steps to improve tax collection. These include greater use of digital systems, stronger monitoring of businesses, faceless tax processes and more enforcement measures.
Prime Minister Shehbaz Sharif recently told industrialists that the government had recovered Rs. 800 billion through enforcement during the previous fiscal year without introducing new taxes. The reported claim has not been independently verified.
The FBR collected Rs. 13.01 trillion during FY26, which was Rs. 1.26 trillion, or around 11 percent, higher than the previous year.
The increase was broadly in line with nominal GDP growth of 10.8 percent. However, the tax-to-GDP ratio remained unchanged at around 10.3 percent.
These numbers suggest that although tax collection has increased in rupee terms, the country still has room to bring more economic activity into the formal tax system.
What the Figures Mean for Salaried Workers
For salaried employees, the latest figures may once again raise concerns about fairness.
Many workers already feel that a large share of their income goes toward taxes and other deductions. Since income tax is normally collected directly through payroll, employees have limited ability to delay or avoid payment.
The latest data does not mean that salaried taxpayers are being taxed more heavily than every other group on an individual basis. Instead, it shows that the overall amount collected from salaried income was much higher than the amount collected from the property sector during the first two months of FY27.
It is also important to remember that the property sector received a significant reduction in transaction tax rates, which directly affected the amount collected.
Therefore, the 225 percent gap should be viewed in the context of tax policy changes rather than as proof that all property owners or investors pay less tax than every salaried person.
Government Faces Pressure to Balance Growth and Revenue
The government now faces the difficult task of balancing tax collection with economic growth.
Lower property taxes may help attract buyers, sellers and investors back into the market. They could also support construction activity, which is connected to many other industries, including cement, steel, paint, furniture and financial services.
At the same time, reducing tax rates naturally creates a risk of lower short-term government revenue.
For salaried taxpayers, further relief could help increase disposable income and support household spending. However, the government also needs enough revenue to meet its financial obligations.
The challenge is therefore to expand the tax base instead of depending too heavily on a limited group of taxpayers.
Need for a Wider and Fairer Tax Base
The latest numbers once again highlight the need for Pakistan to expand its tax net.
A tax system that depends heavily on documented salaried income can create a sense of unfairness among employees, especially when other large sectors contribute much less.
The long-term solution is not simply to increase taxes on salaried workers. Instead, more businesses, professionals, traders, property transactions and other income sources need to be properly documented and brought into the formal tax system.
Better documentation can help the government collect revenue from a wider group without placing excessive pressure on people who are already paying taxes regularly.
At the same time, consistent tax rules and reasonable rates can encourage more people and businesses to operate legally rather than remain outside the formal system.
What Comes Next
The first two months of FY27 have provided an early picture of Pakistan’s tax situation for the new fiscal year.
Salaried individuals contributed Rs. 91 billion, up 7.5 percent from the previous year. Meanwhile, the property sector contributed Rs. 28 billion, down around 28 percent.
The result is a striking difference: the salaried class paid 225 percent more income tax than the real estate sector during July and August 2026.
With the government working to improve collection through digital reforms and stronger enforcement, the coming months will show whether other sectors begin contributing more.
Read Also: check
