Pakistan records 27% rise in federal revenue collection, Finance Minister tells NA

Pakistan’s federal revenue collection rose by 27% in the last fiscal year, Finance and Revenue Minister Muhammad Aurangzeb told the National Assembly on Monday, attributing the surge to structural reforms, digital monitoring of key sectors, and stricter enforcement against tax evasion.

Aurangzeb said the Federal Board of Revenue (FBR) collected Rs11.7 trillion in FY2025, compared to Rs9.2 trillion in the previous year—an increase of nearly Rs5 trillion. Withholding tax grew by 28%, sales tax by 26%, federal excise duty by 33%, and customs duty by 16%. He described the performance as “strong and structurally driven rather than one-off.”

The minister highlighted that Pakistan’s tax-to-GDP ratio had improved from 8.5% to 10.3%, with expectations to reach 11% this year, aided by technology-led reforms monitored weekly by the Prime Minister. Enforcement efforts targeted widening and deepening the tax net, with nearly Rs200 billion collected from retailers and wholesalers and around 400,000 non-null returns filed—“a real compliance gain,” he said.

Digital production monitoring in the sugar and cement sectors contributed additional collections of Rs7 billion and Rs10 billion respectively between July and November. Aurangzeb urged members to share intelligence on suspected evasion to further tighten enforcement.

He also addressed access to finance in agriculture, noting the government’s collateral-free loan programme for farmers holding less than five acres and engaged in subsistence livestock farming. The first-loss guarantee and subsidy would be provided through the State Bank and the scheme has already been operationalised.

On the IMF Governance Diagnostic Report, Aurangzeb said it was based on over 100 meetings involving more than 30 departments and explicitly acknowledged Pakistan’s progress in fiscal performance, primary surplus, inflation moderation, reserves building, State Bank strengthening, FATF exit, digitalisation reforms, and alternative dispute resolution. He stressed that the report’s 15 recommendations are technical in nature and not a judgment on any government. Pakistan will submit its action plan by December 31, which will be shared with the Standing Committee on Finance.