Salaried class tax payments reached about Rs193 billion in the first four months of the current fiscal year, nearly 360 per cent more than the Rs42 billion paid by the real estate sector. The gap opened up after the government halved property taxes, cutting the sector’s payments by Rs34 billion.
According to provisional figures reported by ProPakistani, the real estate sector paid just Rs42 billion in withholding taxes during July-October, down Rs34 billion or 45 per cent from the same period last year.
The salaried class paid about Rs193 billion over the same four months, up Rs13.5 billion from Rs179 billion last year. The gap between the two has now widened to Rs151 billion.
How the property tax cut worked
The budget cut the advance tax on property sales from 5.5 per cent to 2.75 per cent and on purchases from 2.5 per cent to 1.25 per cent. The government made the cut after the International Monetary Fund backed a 50 per cent reduction in June, on the request of Prime Minister Shehbaz Sharif’s government.
The cut has already cost the exchequer heavily. Advance tax on property sales fell from Rs52.7 billion to Rs27.3 billion, a drop of 48 per cent. Tax on property purchases fell from Rs23.1 billion to Rs14.7 billion, a drop of 37 per cent. The Express Tribune reported that the government’s decision has so far extended Rs34 billion in benefits to the sector.
Property activity has picked up since the government reversed its policy of discouraging speculative investment. Yet the sector’s tax payments have kept falling.
Who else pays
Wholesalers and retailers together paid Rs24.7 billion in the four months, up 2.5 per cent. Retailers and the real estate sector together paid only Rs67 billion, which is Rs126 billion less than the salaried class paid on its own.
Tax collection from professional services rose 17 per cent to Rs111 billion during July-October, adding to the burden carried by documented taxpayers.
The Federal Board of Revenue (FBR) has also booked a Rs95 billion shortfall for July-October, with revenue growth of only 6.5 per cent.
The salaried class tax gap keeps growing
The contrast is not new, but it has sharpened. In the first quarter alone, July-September, the salaried class paid Rs144 billion in income tax. In the last fiscal year, the real estate sector paid Rs236 billion in total, after paying Rs200 billion the year before. The sector’s contribution has now been halved by the rate cut.
In fiscal year 2024-25, the FBR collected Rs545 billion from the salaried class. Before the IMF programme began, that figure stood at Rs391 billion a year; within two fiscal years it had risen to Rs629 billion by June 2026.
The FBR has digitally mapped 1.2 million small shopkeepers who were required to file returns but stayed outside the tax net. Bringing them in remains one of the board’s hardest tasks.
What it means for taxpayers
For salaried workers, the figures confirm a familiar complaint: fixed-income earners pay tax at source every month, while sectors with far larger turnovers contribute far less.
The government argues that lower property taxes will lift transactions and widen the base over time. Critics say the relief has gone to an influential sector while the salaried class carries a growing share of the burden. Property valuations remain a weak point, and the FBR has been revising property rates in Islamabad and Abbottabad to close gaps in the system.
The debate over tax fairness runs alongside wider questions about the economy, and the FBR has been tightening its rules on advance payments and property valuations.
What happens next
The FBR’s shortfall puts pressure on the rest of the fiscal year. If revenue growth stays near 6.5 per cent, the board will need either new measures or deeper spending restraint to meet its target. The stock market has had its strongest weekly rally in six months, and services exports grew 22.6 per cent on the back of IT, which shows that documented sectors can still deliver growth.
For the salaried class, the next budget will be the test. It will show whether the government narrows the gap or leaves fixed-income earners to carry it again.
Frequently asked questions
How much tax did the salaried class pay?
About Rs193 billion in income tax during July-October, up Rs13.5 billion from Rs179 billion in the same period last year.
How much did real estate pay?
The real estate sector paid Rs42 billion in withholding taxes, down Rs34 billion or 45 per cent from last year.
Why did real estate payments fall?
The budget halved the advance tax on property sales from 5.5 per cent to 2.75 per cent and on purchases from 2.5 per cent to 1.25 per cent, after the IMF backed the cut in June.
How big is the gap between the two?
The salaried class paid Rs151 billion, or about 360 per cent, more than the real estate sector in the first four months of the fiscal year.
Is the FBR meeting its target?
No. The FBR has booked a Rs95 billion shortfall for July-October, with revenue growth of only 6.5 per cent.
