‘Out of Demand’ tax collection more than doubles in FY2024-25
Income tax collection under the "Out of Demand" category surged by 110.3% to Rs266 billion in FY2025, driven by strong enforcement and a significant rise in arrears recovery. Voluntary payments also saw substantial growth.
- Exceptional growth in "Out of Demand" income tax collection.
- Significant recovery of tax arrears and enforcement efforts.
- Increase in voluntary tax payments and taxpayer confidence.
ISLAMABAD: Income tax collection under the “Out of Demand” category recorded an exceptional growth of 110.3 percent during fiscal year 2024-25, increasing to Rs266 billion from Rs127 billion in fiscal year 2023-24.
According to the Federal Board of Revenue (FBR) report, the third major component of income tax collection was “Out of Demand,” which recorded an exceptional growth of 110.3 percent, rising to Rs. 266 billion in FY2025 from Rs. 127 billion in the previous year. Within this, current demand grew by 78.1 percent, while arrears demand surged by 207.0 percent.
The significant recovery of arrears highlights the strengthened enforcement efforts of field formations.
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The second-largest contributor to income tax collection in 2024-2025 was voluntary payments, which grew by 25.1 percent compared to the previous fiscal year. The share of voluntary payments in direct taxes reached 36.5 percent, slightly down from 36.9 percent in FY2024.
This growth largely stems from a substantial increase in advance tax collection under section 147 of the Income Tax Ordinance, 2001, which rose to Rs. 1,894 billion in 2024-2025 from Rs. 1,530 billion in 2023-2024.
The rising trend in voluntary payments reflects growing taxpayer confidence in the revenue organization and indicates that more individuals are willingly entering the tax net.
Copyright Business Recorder, 2026
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