The Federal Board of Revenue (FBR) has reported a record tax collection of Rs. 11.735 trillion for the fiscal year 2024-25, reflecting a 26 percent increase over the previous year’s figure of Rs. 9.3 trillion. However, despite this impressive growth, the total fell short of the ambitious annual target of Rs. 12.3 trillion by approximately Rs. 1.2 trillion.
The target for FY25 was built on expectations of autonomous growth of around 15 percent, supported by forecasts of 12 percent inflation, a GDP expansion of 3 percent, growth of 3.5 percent in large-scale manufacturing (LSM), and import growth estimated at 12 percent. But these assumptions did not materialize as projected. Actual autonomous growth stood at only 6.1 percent, with inflation dropping sharply to below 0.3 percent in the final quarter, GDP settling around 2.5 percent, LSM shrinking by 1.52 percent, and import growth remaining under 16 percent. Without additional policy actions and aggressive enforcement, tax revenues would have likely been limited to around Rs. 10.07 trillion.
FBR’s proactive measures, however, helped bridge much of this shortfall. The revenue authority’s initiatives contributed an extra Rs. 1.665 trillion, lifting the total collection to Rs. 11.735 trillion. Breaking down this Rs. 2.435 trillion increase over last year, Rs. 766 billion came from organic economic activity (autonomous growth), Rs. 805 billion from policy-driven adjustments, and a significant Rs. 865 billion from stepped-up enforcement efforts. This Rs. 865 billion secured through enforcement actions marks the highest ever recorded, far exceeding the previous peak of Rs. 105 billion.
A closer look at the collection composition shows Rs. 5.784 trillion was generated from income tax, up by 28 percent compared to last year. Sales tax contributed Rs. 3.9 trillion, growing by 26 percent. Customs duty amounted to Rs. 767 billion, a rise of 16 percent, while federal excise duty collected reached Rs. 1.284 trillion, posting an increase of 27 percent.
To achieve these figures, FBR ramped up enforcement across multiple fronts. Measures included rigorous recovery drives targeting high-net-worth individuals using insights from banking data, uncovering undeclared bank accounts and underreported income streams, and tightening audit selection protocols. Advance tax collection efforts were strengthened, and automated tools helped detect underpayments.
On the sales tax side, FBR introduced updated return formats to counter fraud and rolled out regulatory changes. Production monitoring under Section 40B was launched in selected industries, with plans to extend it to over eight additional sectors. Coordination with three major banks improved oversight of withholding taxes, while aggressive enforcement of point-of-sale integration was carried out in retail and wholesale businesses across major urban centers.
In customs, digital initiatives like faceless assessments and electronic enforcement checkpoints supported wider compliance. Efforts also intensified against manufacturers bypassing the sales tax framework, broadening the tax base.
Despite the overall subdued economic backdrop, these combined policy and enforcement strategies enabled FBR to register its highest-ever tax collection, helping reduce the gap against a demanding revenue target. This performance highlights both the resilience of tax machinery under challenging conditions and the necessity for continued reforms to stabilize Pakistan’s fiscal trajectory.