The salaried class has once again emerged as the highest contributor to Pakistan’s income tax revenue during the first quarter of the ongoing fiscal year, according to figures shared by the Federal Board of Revenue (FBR). The contribution saw a substantial rise as compared to the same period last year, highlighting the growing tax burden on fixed-income earners.

From July to September 2025, salaried individuals contributed Rs130 billion in income tax, up from Rs110 billion recorded in the first quarter of the previous fiscal year. This represents an increase of Rs20 billion and reflects an 18 percent growth in tax collections from this segment alone.

Despite this rise, the overall revenue collection for the first quarter fell short by more than Rs200 billion. FBR officials attributed part of this shortfall to tax losses estimated at around Rs70 billion caused by flood-related disruptions.

According to official data, the FBR reported overall revenue growth of 12.5 percent during Q1. Income tax collections grew by 11 percent year-on-year, while sales tax revenue rose by 13 percent. Federal excise duty collections increased by 26 percent, and customs duty also posted a 13 percent rise, showing a mixed picture of fiscal recovery.

During the full previous fiscal year, the salaried class had contributed Rs553 billion in income tax, underscoring how heavily this group has continued to carry Pakistan’s direct taxation framework.

Meanwhile, Pakistan’s tax reforms were highlighted on the global stage when the World Bank invited FBR to present its institutional transformation as a case study in public sector reform during the World Bank Annual Meeting in Washington, D.C.

The session was attended by Federal Minister for Finance and Revenue Muhammad Aurangzeb, FBR Chairman Rashid Mahmood Langrial, and other senior officials. The finance minister stated that Pakistan has executed one of its most ambitious tax system reforms, modernising both administration and technology under direct supervision of the Prime Minister.

He added that the transformation plan is entirely homegrown, enjoys full cabinet endorsement, and is already producing early improvements in governance and compliance. According to the government, these reforms aim to build a stronger foundation for long-term and sustainable economic growth.