AGP Flags Salary-Driven Rise in Tax Burden
The Auditor General of Pakistan (AGP) has revealed that a sharp rise in withholding tax collection during FY24 was primarily driven by higher deductions on salaried income.
According to the latest report published by AGP on Inland Revenue and Customs, withholding tax collection reached Rs2.74 trillion in 2023-24, accounting for more than 60 percent of total direct tax receipts.
The mechanism, which relies on at-source deductions by withholding agents, has become the dominant contributor to the direct tax system of Pakistan.
The report highlighted that a large share of withholding taxes came from areas such as exports, contracts, bank interest, and other payments treated as minimum or final tax regimes.
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Collections from telephone bills and property transactions were also significant, though adjustments often went unclaimed by non-filers.
The Federal Board of Revenue (FBR) recorded Rs1.65 trillion under these heads, showing an increase of nearly Rs430 billion compared with the previous fiscal year.
The AGP attributed this growth to steeper tax rates applied to the salaried class, which continues to shoulder the bulk of the government’s revenue drive.
