Islamabad, October 29, 2025 – In a stunning fiscal performance, the Federal Board of Revenue (FBR) has reported a historic surge in salary tax collection, marking the highest growth across all income tax categories during fiscal year 2024-25 (FY25).
According to the FBR’s annual report, the withholding tax (WHT) on salaries soared by a massive 55%, rising from Rs391.4 billion in FY24 to an unprecedented Rs605.6 billion in FY25 — an all-time record in Pakistan’s taxation history. Officials hailed it as a “milestone achievement,” crediting the reduction in income tax slabs and the increase in rates for higher earners.
“This year proved that Pakistan’s salaried class is leading the tax revolution,” an FBR spokesperson stated, emphasizing that the results reflect strong enforcement, policy reforms, and improved compliance across major sectors.
Overall, Direct Taxes (DT) remained the backbone of the FBR’s revenue system, contributing a robust 49.3% share of total federal tax collection. The total direct tax receipts climbed to Rs5,791.7 billion, up from Rs4,530.7 billion a year earlier — a remarkable 27.8% growth despite tough economic conditions and Rs55.5 billion in refunds issued.
Within the direct tax regime, withholding taxes accounted for 59% of total income tax collection, reaching Rs3,381.5 billion, up 23.5% year-on-year. Among the top performers, salary tax emerged as the new star, overtaking several traditional revenue streams including imports and contracts.
The FBR report also noted major increases in tax collection from contracts, imports, telecom, and exports, while only bank interest and securities saw a slight dip of 1.6%.
Tax analysts described the surge as a “game-changer,” noting that the government’s bold tax restructuring and digital compliance systems have started to pay off. “The message is clear — the FBR is tightening its grip and the system is finally working,” said one tax expert.
As Pakistan pushes toward economic stability, the record-breaking rise in salary tax collection sends a strong signal: the country’s revenue system is entering a new era of accountability and growth.