Islamabad, February 12, 2026 – Buyers of new motor cars have paid nearly Rs19 billion in advance income tax to the Federal Board of Revenue (FBR) during the first seven months (July 2025 – January 2026) of the current fiscal year.
Advance Tax Collection Surges 50%
According to provisional FBR data, advance tax collections from new car buyers reached Rs18.88 billion in 7MFY26, up from Rs12.59 billion in the same period last year, marking a 50% year-on-year increase.
In January 2026, collections soared 37% month-on-month, reaching Rs2.17 billion, compared with Rs1.58 billion in January 2025.
Auto Sales Growth Drives Tax Collections
Analysts attribute the surge in tax collection to a sharp rise in car sales. Arif Habib Limited reported that January 2026 saw 23,100 new cars sold, the highest monthly volume since June 2022, reflecting a 74% month-on-month and 36% year-on-year increase, according to Pakistan Auto Manufacturers Association (PAMA) data.
Cumulatively, 7MFY26 auto sales grew 44% YoY to 111,400 units. The January spike was largely due to the new-year effect, as consumers postponed vehicle purchases to ensure registration in the new calendar year.
Factors Supporting Sales Growth
The year-on-year increase in car sales is also driven by:
• New model launches attracting buyers.
• Improving macroeconomic conditions, including lower inflation.
• Easing interest rates, supporting auto financing and affordability.
Analysts say that the strong performance in both tax collection and auto sales reflects a recovering automotive sector and improving consumer confidence in Pakistan.