FBR’s Withholding Tax Collection Surges 32.7pc in FY2025-26

The Federal Board of Revenue (FBR) has achieved a major revenue milestone, reporting a substantial 32.7 percent increase in withholding tax collection for the ongoing fiscal year (FY2025-26).

Provisional figures show that the amount collected has reached Rs1.25 trillion, rising sharply from Rs941 billion recorded during the same period last year.

This significant growth reflects stronger tax compliance across the country and the positive impact of new measures aimed at improving revenue performance.

Year-on-Year Performance Snapshot

The comparison with last year highlights a clear expansion in Pakistan’s direct tax base:

The increase is largely driven by sectors where the FBR tightened enforcement and adjusted withholding tax rates.

Major Contributors to the Growth

• Salaries: A strong rise of 59.2 percent, supported by inflation-related salary increases and stricter documentation, reinforcing its position as a dependable tax source.
• Dividends: Up by 55.1 percent, reflecting improved corporate profitability and higher dividend payouts.
• Electrical Energy: A 53.5 percent jump connected to tax collected through electricity bills, influenced by tariff changes and expanding commercial activity.
• Contracts: A 25.2 percent increase in tax deducted from contractor payments, indicating steady progress in construction and infrastructure projects.
• Bank Interest and Securities: A 16.2 percent rise driven by tax collected on profit from bank deposits and financial instruments.

Overall, the latest figures indicate that the government’s enforcement efforts and policy adjustments are translating into stronger revenue outcomes. With several key sectors showing consistent growth, the FBR appears on track to close the fiscal year with a reinforced direct tax base and improved collection momentum.