ISLAMBAD: The Federal Board of Revenue (FBR) announced that Pakistan’s tax-to-GDP ratio surged to 10.3% in the fiscal year 2024–25 — breaking a decade-long stagnation that averaged just 8.7%.
According to the FBR’s Annual Report for FY 2024–25, the country’s total revenue collection reached an impressive Rs. 11,744.3 billion, compared to Rs. 9,299.1 billion in the previous year, reflecting a robust 26.3% growth and an increase of nearly Rs. 2.4 trillion in just one year.
The report credited this improvement to “strategic policy reforms, strict administrative oversight, and enhanced audit enforcement,” marking a significant turnaround in the country’s fiscal landscape.
Despite sluggish performance in major economic sectors, the FBR maintained strong momentum in tax collection across all four major revenue heads — income tax, sales tax, federal excise duty, and customs duty.
The data also revealed a remarkable shift toward direct taxation. From FY 2015–16 to FY 2020–21, the average ratio of direct to indirect taxes stood at 38:62. However, with focused reforms targeting high-income earners, the share of direct taxes jumped from 37.2% in FY 2021–22 to 49.3% in FY 2024–25, signaling a fairer and more progressive tax regime.
Notably, collection out of demand—a key indicator of audit effectiveness—rose by 110.3%, while income tax revenue from registered taxpayers surged 37.1% year-on-year, underscoring better compliance and enforcement.
In the domestic sales tax category, the automobile sector led the growth, with tax collections soaring by 158.8% from motor cars and 136.2% from motorbikes, reflecting expanding consumer activity and improved reporting.
The FBR said it remains committed to strengthening tax compliance, broadening the tax base, and sustaining growth momentum to further enhance Pakistan’s fiscal stability.
