Islamabad, January 26, 2026 — Pakistan’s export of services has delivered a strong boost to national revenues, helping the Federal Board of Revenue (FBR) record a 22 percent increase in tax collection during the first half of fiscal year 2025–26 (July–December) compared to the same period last year.
According to provisional figures, the FBR collected Rs3.77 billion in withholding income tax on exports of services during 1HFY26, up from Rs3.09 billion in the corresponding period of the previous fiscal year, reflecting sustained growth in Pakistan’s services sector.
December 2025 Performance
On a month-on-month comparison, tax receipts from service exports also showed positive momentum. In December 2025, the FBR collected Rs702 million, registering an 8 percent increase compared to Rs653 million collected in December 2024.
Legal Framework for Tax Collection
The withholding tax on export of services is collected under Section 154A of the Income Tax Ordinance, 2001. Notably, the tax deducted under this section is treated as final tax, meaning no further income tax is payable on these receipts.
Applicable Withholding Tax Rates on Export of Services
| S. No. | Type of Receipt | Rate of Tax |
| 1 | Export proceeds of computer software, IT services or IT-enabled services by persons registered with Pakistan Software Export Board (PSEB) | 0.25% of proceeds (for tax years 2024 to 2026) |
| 2 | Any other export of services | 1% of proceeds |
Growing Role of Services Exports
The continued rise in tax collection highlights the expanding contribution of IT and services exports to Pakistan’s economy. Analysts believe that favorable tax rates for registered IT exporters have played a key role in encouraging formalization and higher compliance.
With the global demand for digital and professional services increasing, exports of services are expected to remain a key revenue driver for FBR in the coming months.