A recent study on Pakistan’s taxation system shows that the salaried class is paying far more income tax than many business sectors combined. The report found that employees who receive fixed monthly salaries contributed a much larger share of income tax compared to traders, exporters, retailers, wholesalers, and distributors.
According to the research report titled State, Society and Progressive Taxation in Pakistan, salaried workers paid about Rs391 billion in income tax in 2024. This amount increased sharply from Rs276 billion in 2023. The data shows a rise of more than 40 percent in just one year.
The study states that the total tax paid by salaried employees is around 352 percent higher than the combined tax contributions from traders, exporters, and several other business groups. This means the salaried class is paying nearly four times more tax than these sectors.
Economists say this trend shows a structural imbalance in Pakistan’s tax system. Salaried workers usually have taxes deducted directly from their monthly income, making it easier for the government to collect revenue from them. On the other hand, many business sectors operate with weaker documentation and limited tax reporting.
Experts believe Pakistan needs wider tax reforms to create a fairer system. They suggest bringing more sectors into the formal tax net and improving documentation of business income.
Analysts warn that relying heavily on the salaried class for tax revenue may create dissatisfaction among workers and raise concerns about fairness in the country’s taxation policies.
