ISLAMABAD: The Federal Board of Revenue (FBR) has announced a significant 19% increase in the collection of withholding tax on weddings during the fiscal year 2024–25, highlighting improved compliance and growing formalization in the event management sector.
According to the latest FBR data, withholding tax collected from weddings reached Rs2.02 billion in FY25, compared to Rs1.70 billion in the previous fiscal year. This rise reflects both increased enforcement and a surge in lavish wedding expenditures across Pakistan’s major cities, including Karachi, Lahore, and Islamabad.
The tax is collected under Section 236CB of the Income Tax Ordinance, 2001, which was introduced through the Finance (Supplementary) Act, 2023. The law mandates advance tax collection from individuals or entities organizing events in marriage halls, marquees, hotels, restaurants, clubs, or community centers. This also includes taxes on payments for food, decoration, and other services related to such events.
Under the current tax framework, a 10% withholding tax applies to individuals listed on the Active Taxpayers List (ATL), while a 20% rate applies to those not on the list. The tax collected is adjustable against the filer’s annual tax liability.
Officials explained that the FBR’s focus on weddings comes as part of its broader drive to document informal sectors that generate substantial revenue but often remain untaxed. With weddings in Pakistan often involving extravagant spending, the sector provides a significant opportunity for widening the tax base.
In Karachi alone, authorities noted a rise in tax collections due to frequent large-scale wedding events held in high-end venues and marquees. The FBR continues to coordinate with local administrations and event organizers to ensure accurate reporting and prompt tax collection.
Experts suggest that the growing tax on weddings could encourage more transparency in event planning businesses, helping the government capture fair revenue from one of the country’s most vibrant and profitable industries.
