The Federal Board of Revenue (FBR) recorded a sharp increase in withholding tax collections from the salaried class, rising to Rs. 605.6 billion in fiscal year 2024–25 from Rs. 391.4 billion in 2023–24 — an extraordinary growth of 54.7%.
According to a newly released FBR report, withholding taxes accounted for 59% of the total direct tax collection in 2024–25, compared to 60% in the previous fiscal year.
Within the contracts category, collections climbed 39%, reaching Rs. 737.7 billion from Rs. 530.7 billion. Withholding tax from electricity bills also grew by 11.2%, increasing from Rs. 129.8 billion to Rs. 144.4 billion during the same period.
The highest jump came from salary-based withholding taxes, which rose by Rs. 214.2 billion — or 55% — largely due to a reduction in income tax slabs and higher rates per slab. This policy adjustment pushed collections from salaries up from Rs. 391.4 billion in FY 2023–24 to Rs. 605.6 billion in FY 2024–25.
Significant growth was also observed in withholding taxes on contracts, imports, telephone usage, and exports.
Overall, major items contributed 71.1% to the total withholding tax collection. Total withholding tax collection for FY 2024–25 reached Rs. 3,381.5 billion, up 23.5% from Rs. 2,739.1 billion in the previous fiscal year.
The report noted that the top 15 revenue-generating components remained nearly unchanged from last year, except for salaries, which moved up to become the second-largest contributor. Fourteen of these 15 major components posted positive growth, while collections from bank interest and securities dipped by 1.6%.
