Capital gains tax revenue surges 184% as record Pakistan Stock Exchange trading drives historic collections
KARACHI: The Federal Board of Revenue (FBR) collected nearly Rs139 billion in Capital Gains Tax (CGT) on the disposal of securities during fiscal year 2025-26 (FY26), registering a remarkable 184 percent increase over the previous year as record trading activity at the Pakistan Stock Exchange (PSX) significantly boosted tax revenues.
According to provisional data available with PkRevenue, CGT collection rose from Rs49 billion in FY25 to around Rs139 billion in FY26, making it one of the strongest-performing tax heads during the fiscal year.
Record PSX rally boosts tax collection
Officials attributed the sharp increase in capital gains tax receipts to unprecedented trading activity at the Pakistan Stock Exchange, where the benchmark KSE-100 Index repeatedly reached new record highs throughout FY26.
The sustained market rally encouraged increased buying and selling by both institutional and retail investors, resulting in substantially higher taxable capital gains.
The Large Taxpayers Office (LTO) Karachi, the FBR’s largest revenue-generating field formation, is responsible for administering and collecting Capital Gains Tax on transactions involving listed securities.
According to FBR sources, the surge in market activity translated into significantly higher tax receipts, reflecting the growing contribution of Pakistan’s capital market to the national exchequer.
Strong collections continue in June
The FBR maintained robust CGT collection momentum during the final month of the fiscal year despite heightened geopolitical uncertainty.
The tax authority collected approximately Rs25 billion in Capital Gains Tax during June 2026, compared with Rs13 billion in the corresponding month of the previous year, representing an increase of around 95 percent.
Middle East tensions create volatility
Officials noted that escalating geopolitical tensions in the Middle East, particularly the conflict involving the United States, Israel and Iran, created periods of volatility in global and domestic financial markets during the latter part of FY26.
The uncertainty weighed on investor sentiment and triggered fluctuations in equity markets worldwide.
However, despite these challenges, Pakistan’s stock market continued to witness strong trading volumes throughout the fiscal year, enabling the FBR to record one of its highest-ever collections from Capital Gains Tax on securities.
The robust growth in CGT receipts also made a significant contribution to the FBR’s overall tax collection during FY26, underscoring the increasing importance of capital market transactions as a source of government revenue amid improving investor participation.