Growth driven by digital initiatives, enforcement actions, and increased tax compliance in retail sector.
The Federal Board of Revenue (FBR) reported that sales tax collection through the Point-of-Sale (PoS) system increased by 40% in FY25, reaching Rs414 billion, compared to Rs295 billion in the previous year. This boost reflects a significant step forward in the documentation of retail sales.
The FBR also reported a 42% increase in real tax collection in FY25, the highest in a decade. While nominal growth may be inflation-driven, real growth indicates stronger purchasing power, which supports the government’s ability to fund public welfare programs.
The total incremental collection for FY25 was Rs2.435 trillion, which included Rs766 billion from autonomous growth, Rs805 billion from new taxes, and Rs865 billion from enforcement measures. In contrast, enforcement measures in FY24 only yielded Rs105 billion.
The rise in collections despite economic challenges and disinflation in the latter part of the fiscal year was attributed to a series of enforcement and digital initiatives. These included targeted recovery from high-net-worth individuals, the identification of undeclared bank accounts, and AI-driven audits to detect income under-reporting.
Additional efforts included the launch of automated analysis units to spot underpayments, measures to combat sales tax fraud, and the use of real-time stock-taking to enhance digital monitoring across the value chain.
The FBR also expanded production monitoring tools and strengthened oversight of withholding tax through the SWAPS system, a collaboration with three banks. Further gains were achieved through customs reforms, such as faceless assessments and digital enforcement stations, and focused recovery drives aimed at broadening the tax base.
