A recent study on Pakistan’s taxation system has highlighted that salaried workers carry a much heavier share of the country’s tax burden compared to other sectors.
According to the research, employees paying income tax contribute 3.5 times more than exporters, retailers, wholesalers, and distributors combined, showing a significant imbalance in tax contributions.
In 2024, salaried workers paid Rs. 391 billion in income tax, marking a 41.7% increase compared to 2023. Over the past five years, their total contribution has reached Rs. 1,144.94 billion, indicating that the government relies heavily on the salaried class to generate revenue. This trend shows that while salaried employees face a high tax burden, other business sectors contribute relatively little in comparison.
Researchers say this situation reflects a structural dependence on income from salaried individuals rather than a balanced system where all sectors share taxation fairly.
While exporters, wholesalers, retailers, and distributors earn significant revenues, their contribution to the national tax pool remains low. This imbalance raises concerns about fairness and sustainability in Pakistan’s taxation system.
Experts suggest that widening the tax net and bringing more sectors into the formal tax system could help reduce the disproportionate pressure on salaried workers.
They also recommend reforms to ensure that businesses and high-earning sectors pay a fair share, which could strengthen public finances and reduce reliance on employee income.
The study serves as a reminder of the challenges facing Pakistan’s economy. A more balanced approach to taxation could not only ease the burden on salaried workers but also encourage broader compliance, boost government revenue, and create a more equitable system for all contributors.
