ISLAMABAD: The Federal Board of Revenue (FBR) has recorded a massive surge in capital gains tax (CGT) collection during the first nine months of fiscal year 2025–26, fueled by a strong rally at the Pakistan Stock Exchange (PSX).
According to official data, CGT collection reached Rs101 billion from July to March (9MFY26), compared to Rs24.27 billion in the same period last year—registering an exceptional growth of 317% year-on-year.
Officials attributed the sharp increase to bullish equity market performance, as the PSX hit multiple record highs during the period. The rally encouraged higher trading volumes and significantly boosted investor participation in the stock market.
Tax authorities highlighted that improved liquidity, positive market sentiment, and strong corporate earnings played a key role in sustaining momentum in equities, ultimately driving higher tax revenues from securities transactions.
On a monthly basis, CGT collection in March 2026 rose by 45% year-on-year, reaching Rs8 billion, up from Rs5.53 billion in March 2025. Despite global market volatility driven by geopolitical tensions—including developments involving Iran and the United States—Pakistan’s stock market remained relatively resilient.
Market analysts noted that the surge underscores the strong correlation between tax revenues and stock market cycles, with collections heavily dependent on trading activity and capital appreciation in listed securities.
Capital gains tax is imposed under Sections 37A and 147(5B) of the Income Tax Ordinance, 2001, targeting profits earned from the sale of listed securities. The framework aims to document investment income while promoting participation in formal financial markets.
Experts believe the significant jump in CGT collection will provide short-term support to revenue figures. However, they caution that sustaining this growth will depend on continued market stability, investor confidence, and consistent performance of the equity market.
