Salaried Class Pays More Income Tax Than Exporters in 2026. Salaried class pays more income tax than exporters, retailers and property sector combined in FY26. Yes, official data confirms this. During the first seven months, documented employees contributed more to national revenue than three major economic sectors together.
This trend raises serious questions about tax fairness, IMF pressure, and Pakistan’s fiscal strategy for 2026.
The Big Tax Gap in FY26: What the Data Shows
According to official figures from the Federal Board of Revenue (FBR), salaried individuals paid Rs. 315 billion in income tax from July to January FY26.
Meanwhile, exporters, retailers, and the property sector collectively paid Rs. 293 billion.
That means the salaried class paid Rs. 22 billion more than these three influential sectors combined.
This is not a small difference. It reflects a structural shift in Pakistan’s tax collection model.
Income Tax Collection Comparison (July–January FY26)
| Sector | Income Tax Paid (Rs. Billion) | Change from Last Year |
|---|---|---|
| Salaried Individuals | 315 | Up from 284 |
| Exporters (Total) | 101 | Unchanged |
| Retailers | 40 | Slight Increase |
| Property Sale (236C) | 105 | Up from 65 |
| Property Purchase | 47 | Down from 66 |
| Combined (3 Sectors) | 293 | Mixed Trend |
The numbers clearly show growing reliance on payroll taxation.
Why Is the Salaried Class Paying More?
1. Automatic Tax Deduction System
Salaried employees cannot avoid tax deductions. Their income tax is deducted at source through payroll systems.
Employers directly transfer tax to FBR.
There is no delay. No negotiation. No underreporting.
2. Limited Informal Activity
Unlike retailers or property traders, salaried workers operate within the documented economy.
Their salaries are recorded.
Their tax slabs are fixed.
Their deductions are traceable.
3. Broader Economic Pressure
Pakistan is currently under an IMF program. The upcoming review by the International Monetary Fund adds pressure to maintain revenue targets.
To meet fiscal benchmarks, authorities often rely on the most compliant taxpayers.
And that is the salaried class.
Exporters’ Tax Contribution in FY26
Exporters paid:
- Rs. 50 billion in direct income tax
- Rs. 51 billion as 1% advance tax
- Total contribution: Rs. 101 billion
This amount remained almost unchanged compared to last year.
Exporters argue they already face high production costs, global competition, and energy tariffs. Many receive tax concessions to promote foreign exchange earnings.
Still, the comparison shows salaried individuals alone contributed three times more than exporters.
Retailers’ Tax Payments Under Sections 236G & 236H
Retailers operate nearly three million outlets across Pakistan.
Under Section 236G and 236H of Income Tax Ordinance:
- Rs. 15 billion collected under 236G
- Rs. 25 billion collected under 236H
- Total: Rs. 40 billion
While this shows growth from last year, the overall figure remains significantly lower than salaried tax payments.
Retail sector documentation remains a long-standing challenge.
Property Sector Tax Breakdown FY26
Property transactions saw mixed performance.
Sale & Transfer (Section 236C)
- Rs. 105 billion collected
- Up from Rs. 65 billion last year
Purchase & Transfer
- Rs. 47 billion collected
- Down from Rs. 66 billion
Tax Rates for Property (ATL Persons)
| Transaction Value | Tax Rate |
|---|---|
| Up to Rs. 50 million | 4.5% |
| Rs. 50–100 million | 5% |
| Above Rs. 100 million | 5.5% |
Non-ATL persons pay up to 11.5%.
Despite these rates, property taxation fluctuates due to market cycles and policy incentives.
Growing Reliance on Payroll Taxes
In July–January FY25, salaried individuals paid Rs. 284 billion.
In FY26, this increased to Rs. 315 billion.
That is a rise of Rs. 31 billion in just one year.
This signals increased dependency on documented wage earners.
Economic experts argue that relying heavily on the salaried class may discourage middle-income growth and reduce disposable income.
IMF Review and Tax Policy Concerns for 2026
Pakistan is preparing for another IMF review mission.
The Finance Ministry recently established a Tax Policy Office to design structural reforms.
Key questions include:
- Will income tax slabs change in FY27?
- Will relief be provided to salaried individuals?
- Can undocumented sectors be brought into the net?
The IMF typically pushes for widening the tax base rather than increasing rates on compliant taxpayers.
Whether this approach will materialize remains uncertain.
Economic Impact on Middle-Class Households
When salaried class pays more income tax than exporters, retailers and property sector combined, it affects:
- Monthly household budgets
- Savings rate
- Consumer spending
- Loan affordability
Higher payroll deductions reduce disposable income.
Lower disposable income reduces market demand.
And that slows economic growth.
This cycle requires careful fiscal planning.
Structural Tax Challenges in Pakistan
Pakistan’s tax-to-GDP ratio remains among the lowest in the region.
Major structural issues include:
- Informal economy dominance
- Weak enforcement in retail sector
- Under-valuation in property transactions
- Political influence of powerful sectors
Meanwhile, salaried taxpayers remain the easiest revenue source.
This imbalance continues year after year.
Policy Recommendations for Balanced Taxation
To ensure fairness:
- Expand digital tracking of retail transactions
- Integrate property valuation reforms
- Simplify exporter compliance without over-concessions
- Reduce payroll burden for middle-income employees
- Strengthen documentation through technology
Broadening the tax base is more sustainable than squeezing existing taxpayers.
FAQs
Why is the salaried class paying more tax in Pakistan?
Because income tax is deducted directly from salaries at source. Compliance is automatic and transparent.
How much tax did salaried individuals pay in FY26?
Rs. 315 billion during July–January FY26.
How much did exporters pay in FY26?
Exporters paid Rs. 101 billion including advance tax.
What is Section 236C in property tax?
It is tax collected on sale and transfer of immovable property.
Will salaried tax rates decrease in FY27?
This depends on IMF negotiations and federal budget decisions.
Conclusion
Salaried class pays more income tax than exporters, retailers and property sector combined in FY26. The numbers confirm it.
Rs. 315 billion from salaried workers versus Rs. 293 billion from three powerful sectors combined shows structural imbalance.
