ISLAMABAD: Withholding tax contributions saw a significant surge during the first half of the fiscal year 2024-25, with the salaried class emerging as the largest taxpayer group.
Data from the Federal Board of Revenue (FBR) shows that salaried individuals paid Rs. 265.745 billion in withholding tax from July to December 2024, marking a 59.2 percent increase compared to Rs. 166.924 billion collected in the same period of the previous fiscal year.
Withholding tax collected from contracts under Section 153 of the Income Tax Ordinance 2001 amounted to Rs. 299.267 billion, reflecting a 25.2 percent increase. Bank interest and securities under Section 151 generated Rs. 255.352 billion, up 16.2 percent.
Tax collection from imports rose 7.6 percent, reaching Rs. 203 billion compared to Rs. 189.349 billion in 2023-24. Dividend income tax under Section 150 recorded Rs. 88.230 billion, growing 55.1 percent.
Withholding tax from electricity bills under Section 235 contributed Rs. 84.788 billion, a 23.1 percent increase.
Sales tax collection at the domestic stage showed strong growth, with electrical energy generating Rs. 283 billion, up 53.5 percent. Cement contributed Rs. 48.275 billion with a 47.7 percent increase, sugar Rs. 58.957 billion with a 26.4 percent increase, cotton yarn Rs. 43.389 billion with a 37.2 percent increase, and motor cars Rs. 14.848 billion.
At the import stage, photosensitive semiconductors contributed Rs. 98.732 billion, reflecting a 112.7 percent increase, petroleum, oil and lubricants (POL) Rs. 166 billion with a 12 percent increase, machinery Rs. 72 billion with a 19.6 percent increase, and vehicles other than railway Rs. 61 billion.
Federal Excise Duty (FED) collection from cigarettes, traditionally a major revenue contributor, saw a 2.4 percent decline, dropping to Rs. 102 billion from Rs. 105 billion in 2023-24. Other significant contributors to FED included cement with Rs. 71.54 billion, services Rs. 19 billion, air travel Rs. 18 billion, and fertilizers/urea Rs. 13 billion.
FED collection from aerated water and cigarettes also declined during this period.
Sales tax collection on certain imports showed a decline, with oil seeds and oleaginous reflecting an Rs. 8.6 billion decrease, organic chemicals Rs. 3 billion, and coffee, tea, mate, and spices Rs. 2 billion. Customs duty collections from major imports included Rs. 71 billion from vehicles other than railway, Rs. 30.434 billion from machinery, Rs. 30.319 billion from photosensitive semiconductors, and Rs. 7.2 billion from organic chemicals.
Pakistan’s tax revenue experienced significant growth, driven primarily by higher withholding tax payments, robust domestic sales tax collection, and increased imports. However, cigarette excise duty and taxes on select imports declined, indicating shifts in consumption and trade patterns.
