Local sales tax collection: 15 sectors make major contribution

ISLAMABAD: Nearly 57.3 percent of the sales tax collection on local sales (domestic) was contributed by fifteen sectors, including electrical energy, POL products, sugar, cement, cotton yarn, etc during 2024-25.

The FBR latest data disclosed that the net collection of Sales Tax (Domestic) for 2024-25 reached Rs. 1,619.5 billion, marking a substantial increase of 32.4 percent from Rs. 1,222.9 billion in the previous financial year. This represents an additional revenue of Rs. 396.6 billion compared to the prior year.

Electrical energy has become the leading contributor, accounting for 22.8 percent of the total, driven by an increase in power tariffs. Conversely, the contribution from POL products decreased to 2.6% as compared to 6.9% from the previous financial year. All listed major revenue-generating items showed positive growth, except for cigarettes and POL products in the current financial year.

Rs91bn short of target: Q1 tax collection stands at Rs2.563trn

Sales Tax (Domestic) collection on motor cars witnessed a surge of 158.8%. This is driven by enhanced manufacturing volumes of motor cars which rose from 79,594 in FY 2023-24 to 111,402 in FY 2024-25. The Sale of motor cars rose from 81,579 in FY 2023-24 to 112,203 in FY 2024 Increased production volume and sale volume of motor cars have driven the growth rate in revenue collection.

Sales Tax (Domestic) collection on motor cycles witnessed a surge of 136.2%. This is driven by enhanced manufacturing volumes of motor cycles which rose from 1,150,090 in FY 2023-24 to 1,514,718 in FY 2024-25. The Sale of motor cycles rose from 1,150,112 in FY 2023-24 to 1,518,752 in FY 2024-25. Increased production volume and sale volume of motor cycles have driven the growth rate in revenue collection.

Data further disclosed that top 15 commodities accounted for 71.3% of the Sales Tax (Import) collection during 2024-25.

The FBR’s data for 2024-25 revealed that the Sales Tax (Import) constituted a crucial segment of federal tax revenue. In FY 2024-25, the net collection of Sales Tax (Import) amounted to Rs. 2,281.9 billion, up from Rs. 1,863.9 billion from the previous financial year, showing a growth of 22.4 percent.

Sales Tax (Import) collection. Petroleum products were the predominant source of sales tax at this stage, contributing 13.8% to the total Sales Tax (Import).

During FY 2024-25, the collection from POL products reached approximately Rs. 315.1 billion, up from Rs. 309.6 billion in FY 2023-24.

Copyright Business Recorder, 2025