FBR Posts 16% Growth in January Tax Collection

The Federal Board of Revenue (FBR) reported tax collections of Rs1.031 trillion for January, reflecting a 16 percent year-on-year increase compared to Rs873 billion collected during the same month last year. Although the figure remained Rs16 billion below the monthly target of Rs1.047 trillion, the sustained growth has reinforced expectations of double-digit revenue expansion in the months ahead.

According to the FBR, the January performance was driven by robust growth in income tax receipts, steady gains in indirect taxation, and improved compliance levels, underscoring the early impact of its reform-oriented revenue mobilisation framework. Income tax collections recorded a 26 percent YoY increase, while sales tax revenues rose by 12 percent, supported by a gradual recovery in large-scale manufacturing (LSM) activity. Federal Excise Duty (FED) collections surpassed projections, reaching Rs465 billion, up from Rs404 billion last year, while customs duty receipts grew 6 percent YoY to Rs752 billion.

Despite the encouraging monthly trend, cumulative tax collection for July–January (7MFY26) stood at Rs7.176 trillion, falling short of the Rs7.521 trillion target by approximately Rs345 billion. The shortfall has been attributed primarily to lower domestic sales tax collections, the suspension of the super tax, and other transitory factors.

However, the recent Federal Constitutional Court ruling upholding the super tax is expected to generate additional revenues estimated at Rs300 billion, which could substantially narrow the cumulative deficit for the seven-month period.

FBR officials noted that ongoing reforms in digital systems, enforcement mechanisms, and dispute resolution frameworks have strengthened direct taxation, enhanced voluntary compliance, and broadened the tax base. With further recovery anticipated in LSM, the authority remains cautiously optimistic about meeting its FY26 revenue targets.

Overall, the January performance reflects a positive trajectory, exceeding the average 10–11 percent growth recorded over the preceding six months and indicating that structural reform measures are beginning to translate into measurable improvements in Pakistan’s fiscal outlook.