Study Shows Salaried Class Bearing Pakistan’s Largest Tax Burden

A recent study examining Pakistan’s taxation framework has revealed that the salaried segment is bearing a disproportionately larger share of the country’s tax burden compared with several other economic sectors. According to findings cited by The News, salaried individuals are contributing approximately 3.5 times more in income taxes than exporters, retailers, wholesalers and distributors combined.

The research findings were discussed at a policy roundtable organised by Friedrich Ebert Stiftung to mark the launch of the study titled “State, Society and Progressive Taxation in Pakistan,” authored by Sajid Amin Javed.

The report indicates that the salaried class paid approximately Rs391 billion in income tax during 2024, compared with Rs276 billion in 2023. This reflects a year-on-year increase of about 41.66 percent in tax contributions from salaried employees.

According to the analysis, the tax payments made by salaried workers were approximately 352 percent higher than the combined tax contributions of exporters, retailers, wholesalers and distributors.

Researchers characterised this development as a structural shift within Pakistan’s taxation landscape rather than a temporary spike. Data cited in the study shows that income tax collection from salaried individuals increased by approximately 412.6 percent between 2019 and 2024.

The report suggests that the trend highlights an increasing dependence on the salaried segment for revenue mobilisation, while tax contributions from several other sectors remain comparatively limited.

Over the five-year period from 2020 to 2025, salaried employees collectively contributed around Rs1,144.94 billion in taxes. In contrast, retailers paid approximately Rs16.54 billion, while wholesalers and distributors together contributed around Rs35.23 billion during the same timeframe.

The study further argues that the growing reliance on salaried taxpayers may create an impression of improvement in direct tax collection, while underlying structural imbalances in Pakistan’s broader tax system continue to persist.

The discussion surrounding these findings comes at a time when the International Monetary Fund is conducting the third review of Pakistan’s $7 billion Extended Fund Facility programme.