ISLAMABAD: Buyers of new motor cars have paid nearly Rs19 billion in advance income tax to the Federal Board of Revenue (FBR) during the first seven months (July 2025 – January 2026) of the current fiscal year.
According to provisional FBR data, advance tax collections from new car buyers reached Rs18.88 billion in 7MFY26, up from Rs12.59 billion in the same period last year, marking a 50% year-on-year increase.
In January 2026, collections soared 37% month-on-month, reaching Rs2.17 billion, compared with Rs1.58 billion in January 2025.
Auto Sales Growth Drives Tax Collections
Analysts attribute the surge in tax collection to a sharp rise in car sales. Arif Habib Limited reported that January 2026 saw 23,100 new cars sold, the highest monthly volume since June 2022, reflecting a 74% month-on-month and 36% year-on-year increase, according to Pakistan Auto Manufacturers Association (PAMA) data.
Cumulatively, 7MFY26 auto sales grew 44% YoY to 111,400 units. The January spike was largely due to the new-year effect, as consumers postponed vehicle purchases to ensure registration in the new calendar year.
Factors Supporting Sales Growth
The year-on-year increase in car sales is also driven by:
• New model launches attracting buyers.
• Improving macroeconomic conditions, including lower inflation.
• Easing interest rates, supporting auto financing and affordability.
Analysts say that the strong performance in both tax collection and auto sales reflects a recovering automotive sector and improving consumer confidence in Pakistan.
