Pakistan’s salaried class shelled out Rs130 billion in the first quarter, dwarfing the combined Rs71.1 billion from traders, wholesalers, and exporters. As official Federal Board of Revenue (FBR) data reveals, salaried workers—teachers, engineers, nurses— in fact paid more than double what business heavyweights contributed together, sparking outrage over a system that feels rigged against the very people keeping the economy afloat. In a nation where poverty engulfs 44.7 percent under the $4.20 daily line, this disparity isn’t just unfair; it’s a powder keg threatening social cohesion and economic trust.
The numbers, crunched from FBR’s latest quarterly breakdown, lay bare the imbalance. Salaried individuals forked over Rs130 billion, a hefty 18 percent jump from last year’s Q1 haul of Rs110 billion, edging closer to the annual target of Rs600 billion—up from Rs545 billion in FY25. In contrast, property transfers—often the playground of the elite—yielded Rs60 billion, fueled by a budget hike to 4.5 percent on deals under Rs50 million. Exporters, basking in subsidies and low effective rates, managed just Rs45 billion—three times less than salaried payers. Retailers scraped in Rs14.6 billion, wholesalers a measly Rs11.5 billion, together barely half the salaried sum.
This isn’t new; in FY25’s first nine months, salaried folks covered 56 percent of income tax, a record Rs391 billion, while retailers limped in at Rs26 billion. Exporters, raking in $30-31 billion annually, paid a paltry 1 percent effective rate on $15 billion in H1 FY24, versus salaried maxes of 35 percent. For the average earner, it’s salt in the wound: a Rs100,000 monthly salary now taxes at Rs6,000 annually under new slabs, down from Rs30,000 last year, yet still a bite from fixed incomes.
Why this lopsided load? Pakistan’s tax code, a patchwork of incentives and evasions, favors the shadowy informal economy—60 percent of GDP—where businesses underreport via cash deals or offshore tricks. Salaried income, withheld at source, is a sitting duck: progressive slabs climb to 35 percent above Rs4.1 million, with no wiggle room. Businesses, meanwhile, exploit final tax regimes—1 percent on turnover for exporters, 0.5-1 percent for retailers—treating them like presumptive escapes rather than bridges to compliance. Property tycoons flip assets with 4.5 percent bites, but undervaluation and benami holdings shield billions. The IMF’s $7 billion EFF demands revenue hikes, but critics slam its focus on quantity over quality: 75 percent of “direct” taxes are regressive withholdings baked into sales VAT, hammering the poor while elites yacht untaxed.
In FY25, salaried contributions hit five times exporters’ and retailers’, a trend persisting into Q1 FY26 despite budget relief like slab tweaks for middle earners (Rs300,000 monthly now Rs38,833 tax, down from Rs45,833). Associations like the Pakistan Taxpayers’ Alliance decry it as “discriminatory,” arguing optimal collection levels are reached, demanding exporter relief in FY26.
The human cost cuts deep. Salaried workers, 20-30 million strong, are the economy’s spine—paying utilities, mortgages, school fees from taxed stipends—yet watch traders evade via informal bazaars. A Karachi accountant, earning Rs150,000 monthly, gripes on social media: “We fund the state; they fund their villas.” In rural Punjab, where poverty doubles urban rates, a teacher’s Rs50,000 salary vanishes into 10-15 percent tax, leaving nothing for flood-rebuilt homes. This inequity fuels resentment: youth unemployment at 10 percent, women at 21 percent participation, all while 44.7 percent scrape below $4.20 daily. The World Bank warns of “sliding back into poverty during shocks,” exacerbated by regressive burdens that widen the elite-poor chasm. Exporters cry foul too, claiming their 1 percent matches salaried effective rates after deductions, but unverified data suggests otherwise—subsidies like energy rebates keep their margins fat.
Reform whispers grow louder. The Finance Act 2025 eases salaried slabs—0 percent up to Rs600,000, 5 percent to Rs1.2 million—but experts call for overhauls: shift to ability-to-pay with 45 percent top rates on ultra-rich, wealth taxes on feudal lands, 30 percent capital gains. Document the informal via incentives—digital filers get rebates—while ending final regimes that cap business taxes artificially. Cut current expenditure 20-30 percent via elite sacrifices: trim perks for bureaucrats, auction state assets, freeing Rs3 billion yearly. Triple Benazir Income Support to Rs10 billion, shielding 50 million with Rs50 monthly cash, proven to lift nutrition 15 percent. For businesses, tie incentives to compliance: exporters pay progressive slabs post-subsidies, retailers integrate via POS rebates.
Yet, politics stalls progress. Feudal lobbies in Parliament shield property perks; trader unions strike over audits. The FBR, understaffed and corrupt, collects Rs9.5 trillion targeted for FY26 but misses by Rs200 billion in Q1, blaming floods. The IMF conditionality pushes revenue, not equity, risking unrest—past wheat riots echo today’s tax gripes.
Pakistan’s tax tale is a morality play: the diligent burdened, the cunning spared. Q1 FY26’s Rs130 billion from salaries isn’t victory—it’s exploitation, propping a system where 9 in 10 live hand-to-mouth. True equity demands courage: tax the powerful, empower the payers, build a net that catches all. Until then, the salaried class will grind on, funding a dream deferred. Reform now, or watch trust—and the economy—crumble under the weight of injustice.