Pakistan’s salaried class pays Rs420 billion tax in nine months, more than double real estate’s Rs197 billion

Pakistan’s salaried class paid Rs420 billion in income tax during the first nine months of FY2025–26, more than double the Rs197 billion collected from the real estate sector, according to provisional data compiled by the Federal Board of Revenue (FBR).

The tax contribution from salaried individuals increased by Rs29 billion, or 7.5%, compared to Rs391 billion in the same period last year. These figures exclude book adjustments and certain contractual payments under Section 153.

Breakdown of the data shows non-corporate employees contributed Rs187 billion, up 12% year-on-year, while corporate sector employees paid Rs134 billion, marking a 15% increase. Federal government employees contributed Rs41 billion, up 7%, whereas provincial government employees paid Rs59 billion, down 14%.

Despite higher tax rates imposed on the real estate sector, total collections from the segment stood at Rs 197 billion, reflecting a 17% increase. This included Rs137 billion collected from withholding tax on plot sales, up 62%, while collections from plot purchases declined 16% to Rs61 billion following rate reductions in the budget.

Revenue from capital gains in the real estate sector dropped to Rs1.7 billion from Rs5 billion last year, while deemed income tax collections remained limited at Rs1.2 billion.

Officials said the government has largely relied on withholding taxes to generate revenue from the sector, as efforts to expand the tax base have yielded limited results.

The data comes amid rising cost pressures for salaried individuals, with increased fuel prices and household expenses following the Middle East conflict.

The government is considering revisions to property taxation, including reducing withholding tax rates on sales and purchases of plots, and abolishing certain levies. Proposals under discussion include lowering the tax rate on plot sales from 4.5% to 1.5% and on purchases from 1.5% to 0.25%, along with exemptions for first-time homebuyers.

These proposals are expected to be taken up with the International Monetary Fund (IMF) ahead of the upcoming budget review.