The tax deducted from a salaried Pakistani's pay has risen by more than half in two years, while the contribution of retailers, landowners and the property business remains small. That gap came into focus on Tuesday when IMF Regional Director Jihad Azour, opening a two-day tax conference in Islamabad, called for a fairer tax system, according to The Express Tribune.
Azour said a fairer tax system could encourage compliance, better services could strengthen trust, and a more neutral tax structure could let productive firms expand rather than stay small or informal. Broadening the tax base, strengthening revenue administration and cutting tax expenditures were Pakistan's priorities, he said.
What the numbers show
According to the paper, salaried taxpayers paid Rs391 billion a year before the IMF programme, rising to Rs629 billion by June 2026. By contrast, only 137 new retailers had joined the traders' scheme as of October 15, against an annual target of one million.
FBR data show income tax from real estate fell 38% to just Rs35.2 billion in the first quarter of this fiscal year, Rs22 billion less than a year earlier, after the government halved income tax on the sector, a cut the IMF endorsed.
Agriculture income tax tells a similar story: Sindh collected Rs1.1 billion against a Rs2 billion target last fiscal year, and Punjab Rs4 billion against Rs10.5 billion, the report said.
From stability to growth
Azour said Pakistan had made important progress in restoring macroeconomic stability and rebuilding external buffers despite shocks, and the next milestone was turning that stability into durable growth. He warned that high energy and food prices, trade disruption and tighter global financing raise the premium on preserving stability.
The conference comes amid a debate at the top of government over whether the current FBR can deliver; the prime minister has shelved a plan to abolish it, the paper reported.