ISLAMABAD: The Federal Board of Revenue (FBR) has reported a 37% increase in withholding tax collection from retailers during the first half of fiscal year 2025-26 (July–December) compared to the same period last year.
Provisional data shows the FBR collected Rs 21.72 billion from retailers in 1HFY26, up from Rs 15.84 billion in 1HFY25. In December 2025 alone, collections reached Rs 3.82 billion, compared to Rs 3.13 billion in December 2024, highlighting improved tax compliance in the retail sector.
Officials attribute the surge to the government’s ongoing documentation drive and stronger enforcement, which requires manufacturers, distributors, dealers, wholesalers, and commercial importers to collect advance tax under Section 236H of the Income Tax Ordinance when selling goods to retailers or wholesalers.
Under current rules, retailers on the Active Taxpayers List (ATL) pay 0.5%, while non-ATL retailers face 2.5%, incentivizing registration and compliance.
FBR expects these receipts to continue rising as enforcement and documentation efforts expand, reinforcing the government’s focus on broadening the tax base.







