LAHORE: Punjab recorded the highest growth in sales tax collection on services among all provinces during the first nine months of fiscal year 2025-26, with revenue increasing by more than 38%, according to official figures released by the Ministry of Finance.
The province collected Rs244 billion in sales tax on services during July-March FY2025-26, compared with Rs174 billion collected in the same period of the previous fiscal year.
Overall, provincial sales tax collection on services across Pakistan rose 28.5% during the first nine months of FY2025-26. Total collection by all four provinces increased to Rs536 billion, up from Rs417 billion recorded a year earlier.
Punjab emerged as the best-performing province in terms of growth, reflecting stronger tax administration measures and improved compliance in the services sector.
Sindh ranked second in total collection, generating Rs241 billion during July-March FY2025-26, compared with Rs194 billion in the corresponding period of last fiscal year.
Khyber Pakhtunkhwa also posted healthy growth of 20.7%, with sales tax collection increasing to Rs35 billion from Rs29 billion a year earlier.
In contrast, Balochistan witnessed a decline of around 6% in collection. The province collected Rs16 billion during the period compared with Rs17 billion in the same period of FY2024-25.
Under Pakistan’s constitutional framework, provincial governments are responsible for collecting sales tax on services, while the Federal Board of Revenue (FBR) collects sales tax on goods.
Economic analysts said the increase in provincial sales tax collection indicates improving economic activity in the services sector, supported by enhanced digitization, enforcement measures, and improved monitoring systems introduced by provincial revenue authorities.
