Pakistan’s Salaried Workers Paid 360% More Tax Than the Real Estate Sector

Pakistan’s salaried workers paid about Rs193 billion in income tax in the first four months of the current financial year. Over the same four months, the real estate sector paid just Rs42 billion in withholding tax. The gap between the two is Rs151 billion — which means salaried workers paid 360% more tax than the property sector.

The figures, reported by The Express Tribune and ProPakistani from provisional Federal Board of Revenue (FBR) data, cover July to October 2026. They show a tax system in which the burden falls hardest on people whose tax is taken straight out of their pay packet, while a sector worth billions pays far less — and less than it paid a year ago.

The numbers in plain English

The headline figures are simple, and they are worth setting out clearly:

• Salaried workers paid about Rs193 billion in income tax between July and October 2026. That is Rs13.5 billion more than the Rs179 billion they paid in the same four months last year.
• The real estate sector paid Rs42 billion in withholding taxes over the same period. That is Rs34 billion less than a year ago — a fall of 45%.
• The difference between the two is Rs151 billion. In percentage terms, the salaried class paid 360% more than the real estate sector.

The comparison looks even starker when other groups are added in. Wholesalers and retailers together paid Rs24.7 billion, up just 2.5% on last year. Retailers and the real estate sector combined paid only Rs67 billion — Rs126 billion less than the salaried class alone.

One other figure stands out. Tax collection from professional services rose 17% to Rs111 billion during the July–October period. Some salaried employees are also taxed under that category, so the true contribution of people in regular jobs is likely higher still.

Why did the gap get so wide?

The gap did not appear by accident. It is the direct result of a policy decision made in this year’s federal budget: the government halved the advance tax charged on property deals.

Advance tax on the sale of property was cut from 5.5% to 2.75%. Advance tax on the purchase of property was cut from 2.5% to 1.25%. The International Monetary Fund (IMF) endorsed the 50% cut in June 2026, at the request of Prime Minister Shehbaz Sharif’s government.

The effect on revenue was immediate and large:

• Advance tax collected on property sales fell from Rs52.7 billion to Rs27.3 billion — a drop of Rs25.4 billion, or 48%.
• Advance tax collected on property purchases fell from Rs23.1 billion to Rs14.7 billion — a drop of 37%.

In total, the rate cut has given the real estate sector about Rs34 billion in tax relief so far this financial year. For comparison, the real estate sector paid Rs236 billion in tax in the last financial year. The relief is therefore a large share of what the sector used to contribute.

It is important to be clear about one thing: property deals did not dry up. According to ProPakistani, property activity actually picked up after the government reversed its policy of discouraging speculative investment in real estate. The sector paid less tax not because it did less business, but because the tax rate on each deal was cut in half.

How salaried tax works — and why it is different

To understand why the gap matters, it helps to understand how the two kinds of tax are collected.

For a salaried worker, income tax is deducted at source. The employer takes the tax out of the salary before the money ever reaches the employee’s bank account. The worker has no choice in the matter, no room to negotiate, and no way to delay payment. The tax arrives every month, automatically, whether the worker’s costs have gone up or not.

Property tax works differently. The advance tax on a property deal is collected when the property changes hands — at the moment of sale or purchase. If no deal takes place, no tax is due. And when the rate on each deal is halved, the tax collected falls by half even if the number of deals stays the same or rises.

That difference is at the heart of the debate. Salaried workers pay a fixed share of a fixed income, collected automatically. Property owners and dealers pay tax only when they transact, at rates the government has just cut in half.

The Express Tribune’s report puts the contrast bluntly, describing the gap as evidence of “unjust tax policies” that put an undue burden on fixed-income people. That is the newspaper’s characterisation, but the figures behind it are not in dispute: one group paid more than ever, while the other paid far less than before.

The wider tax picture

The salaried-versus-property gap is only part of a bigger story about Pakistan’s tax collection. The FBR has booked a Rs95 billion shortfall for the July–October period, with total revenue growing by only 6.5%.

A shortfall means the tax authority collected less than it had planned to. When revenue growth is slow, the government has less money for public services, debt payments and development spending — and more pressure to find the money somewhere else.

There are signs the FBR is trying to widen the tax net. The authority has digitally mapped 1.2 million small shopkeepers who were required to file tax returns but chose to stay outside the system. Bringing those traders into the tax net would spread the burden more widely — but mapping them is only the first step. Actually collecting tax from them is a much harder job, and one that previous governments have struggled with.

The pattern is familiar to anyone who follows Pakistan’s economy. A small number of documented taxpayers — above all, salaried workers — carry a large share of the direct tax burden, while large parts of the economy, from retail to real estate, contribute far less relative to their size. The latest figures show that pattern getting worse, not better.

What it means for ordinary workers

For a salaried worker, the figures are not abstract. They describe a monthly reality: a slice of every pay cheque goes to the tax authority before the worker sees it. When prices rise, the worker still pays the same tax — and, as the new figures show, more than last year in total.

The Rs193 billion collected from salaried workers in four months works out at roughly Rs48 billion a month. That money comes from teachers, bank staff, factory workers, government employees and office workers across the country. It is collected reliably because it is deducted before pay day.

By contrast, the real estate sector — which deals in assets worth millions and billions of rupees — contributed roughly Rs10.5 billion a month over the same period. Property is one of the most popular places for Pakistanis to store wealth. Plots, houses and flats change hands for large sums. Yet the tax collected from the sector fell by nearly half in a single year, because the rate was cut.

Supporters of the rate cut argue that it was meant to encourage documented property deals. If more deals happen through official channels, the thinking goes, the tax base grows and revenue recovers over time. The early evidence supports the first half of that argument: activity has picked up. But the second half — revenue recovering — has not happened yet. In four months, the sector paid Rs34 billion less than a year ago.

What happens next

Three things are worth watching in the coming months.

First, the FBR’s monthly figures will show whether the gap between salaried workers and the real estate sector narrows or widens further. If property activity keeps rising, the revenue from the sector should eventually stabilise — but at the new, lower rates, it would take a very large increase in deals to make up the difference.

Second, the government faces a decision about whether to keep the lower property tax rates in place. The rates were introduced in the budget with the IMF’s backing, and changing them would be a political as well as an economic decision. But if the FBR’s shortfall grows, the pressure to revisit the relief will grow too.

Third, the effort to bring untaxed traders into the system will be tested. The FBR has identified 1.2 million small shopkeepers who should be filing returns. If even a fraction of them start paying, it would ease the burden on salaried workers. If they do not, the burden will stay where it is — on the people whose tax is deducted before they are paid.

Pakistan is operating under an IMF programme, and tax policy is a central part of those discussions. The fund has long pressed Pakistan to widen its tax base rather than squeezing the same groups harder. The latest figures show how far there is still to go.

Frequently asked questions

How much tax did salaried workers pay?

About Rs193 billion in income tax between July and October 2026, the first four months of the financial year. That is Rs13.5 billion more than the Rs179 billion paid in the same period last year.

How much tax did the real estate sector pay?

Rs42 billion in withholding taxes over the same four months — Rs34 billion, or 45%, less than a year ago.

Why did the real estate sector’s tax fall so sharply?

The government halved the advance tax on property deals in the federal budget. The rate on sales fell from 5.5% to 2.75%, and the rate on purchases fell from 2.5% to 1.25%. The IMF endorsed the cut in June 2026.

What is withholding tax?

It is tax collected at the point where money changes hands — for example, deducted by an employer from a salary, or collected when a property is bought or sold — rather than paid later by the taxpayer.

What is the FBR’s overall position?

The Federal Board of Revenue booked a Rs95 billion shortfall for July to October 2026, with total revenue growing by only 6.5%.

Did property deals fall as well as property tax?

No. Property activity picked up after the government reversed its policy of discouraging speculative investment. The sector paid less tax because the rate on each deal was halved, not because deals stopped.

Conclusion

The figures from the first four months of this financial year tell a clear story. Pakistan’s salaried workers paid Rs193 billion in tax. The real estate sector paid Rs42 billion. The gap — Rs151 billion, or 360% — is the widest it has been, and it opened up because the government chose to halve the tax on property deals while salaried workers kept paying more than ever.

Whether that choice pays off depends on what happens next. If cheaper property taxes bring far more deals into the documented economy, revenue may recover over time. If they do not, the cost will keep falling on the same group it always has: the salaried workers whose tax is taken before they are paid.

For now, the numbers speak for themselves. In four months, the people who earn a fixed salary contributed more than four and a half times as much tax as the entire real estate sector.

Sources

• The Express Tribune: https://tribune.com.pk/story/2639194/realty-sector-gets-rs34b-tax-relief
• ProPakistani: https://propakistani.pk/2026/11/09/real-estate-tax-relief-rs-34-billion-salaried-class/
• The Neutral: https://theneutral.pk/salaried-pakistanis-pay-360-more-tax-than-real-estate-sector/

This article is for general information and education only. It is not legal or financial advice.