The Federal Board of Revenue (FBR) has reported an impressive surge in withholding tax collection growth during fiscal year 2024–25, driven largely by higher deductions from salaried individuals.

According to the latest FBR report, taxes collected from the salaried class skyrocketed to Rs. 605.6 billion, compared to Rs. 391.4 billion in the previous year — marking a remarkable 55% increase.

The sharp rise was mainly attributed to a reduction in income tax slabs and an increase in tax rates per slab, a move that significantly boosted the government’s direct revenue stream. Salaries are now the second-largest source of withholding taxes, highlighting how policy changes have directly impacted employees’ take-home pay.

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Overall, total withholding tax collection grew by 23.5%, reaching Rs. 3,381.5 billion in FY 2024–25 — up from Rs. 2,739.1 billion last year. Withholding taxes continued to dominate the revenue mix, contributing around 59% of total direct tax collection.

The FBR report further revealed that collections from contracts surged by 39%, hitting Rs. 737.7 billion, while electricity bill taxes rose by 11.2%, climbing from Rs. 129.8 billion to Rs. 144.4 billion. Significant gains were also recorded in withholding taxes on imports, exports, and telephone usage, reflecting a broader improvement in compliance and collection efficiency.

Interestingly, out of the 15 top revenue-generating sources, 14 showed positive growth — a sign of stability in the FBR’s tax framework. The only decline was seen in collections from bank interest and securities, which slipped slightly by 1.6%.