Lahore: Chairman Federal Board of Revenue (FBR) Rashid Langrial on Saturday said Pakistan’s salaried class bears a disproportionate tax burden due to widespread underreporting of income by professionals and weak overall tax compliance.
Speaking at ThinkFest in Lahore, he noted that income tax rates for salaried individuals rise to as high as 35 percent, while many professionals remain outside the effective tax net. He said individuals earning higher salaries have no means to conceal income, unlike segments of the informal economy.
Langrial said that out of an estimated 150,000 doctors in the country, only around 55,000 file tax returns, and most of them declare annual incomes below Rs2 million. He added that despite periodic increases in tax rates over the past 15 years, compliance among professionals has remained low.
Highlighting broader trends, the FBR chairman said Pakistan’s tax-to-GDP ratio improved to 10.33 percent this year from 8.83 percent last year, with the number of tax filers rising to 5.9 million. However, he said compliance gaps persist, including an income tax gap of approximately Rs1.2 trillion involving hundreds of thousands of potential taxpayers.
Langrial stressed that broadening the tax base and improving documentation of economic activity were essential for sustainable revenue growth. He said tax rates should be rationalised but warned against reforms that continue to place an unfair burden on salaried individuals while allowing exemptions and underreporting in other sectors.
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