Textile exporters are taken over by salaried class in income tax payments

The salaried class emerged as the third-largest contributor to income tax collection in the outgoing fiscal year (FY24), following closely behind banks and petroleum products, and still surpassing the country’s affluent textile exporters.

The banking sector contributed Rs 946.

08 billion to income tax collection in FY24, a significant 66 per cent increase, from Rs 568.

68bn in FY23. This represents a substantial rise in the sector’s share of income tax collection, from 17.39pc in FY23 to 20.88pc in FY24.

This trend suggests that higher bank profits lead to a greater contribution to income tax revenue.

However, it’s worth noting that banks contribute relatively little to sales tax, federal excise duty, and customs collection.

The salaried class contributed Rs367.8bn to income tax collection in FY24, a 39.42pc rise, from Rs263.8bn in FY23. Interestingly, this contribution exceeds that of wealthy textile exporters by Rs276.

57bn, even though they exported $16.655bn worth of goods in FY24.

Whereas, the textile sector contributed Rs111.

23bn to income tax collection in FY24, a 7.4pc increase, from Rs103.56bn in the previous year. The government modified the fixed tax regime for exporters and increased the rate in the budget.