A recent study has revealed a striking imbalance in Pakistan’s tax system, showing that the country’s salaried class paid 352 percent more taxes than exporters, retailers, wholesalers, and distributors combined. The findings come amid the International Monetary Fund’s (IMF) third review of Pakistan’s $7 billion Extended Fund Facility program.
The study was presented at a roundtable organized by the Friedrich Ebert Stiftung, coinciding with the launch of the report “State, Society and Progressive Taxation in Pakistan” authored by Dr. Sajid Amin Javed.
According to the research, tax collection from salaried individuals rose to Rs. 391 billion in 2024 from Rs. 276 billion in 2023, marking a 41.66 percent increase in just one year. Over the past five years, from 2019 to 2024, the total taxes paid by salaried workers surged by 412.6 percent, reaching Rs. 1,144.94 billion.
In comparison, business sectors contributed significantly less: retailers paid approximately Rs. 16.54 billion, while wholesalers and distributors contributed Rs. 35.23 billion over the same period. The report describes this trend as a systemic shift in tax extraction, rather than a one-time spike, underscoring growing pressure on salaried workers while key business sectors contribute a disproportionately smaller share.
The study raises concerns about the sustainability and fairness of Pakistan’s taxation system, particularly as the country navigates IMF conditions and seeks to broaden its revenue base.
