The Federal Board of Revenue (FBR) has reported a robust 28.58% year-on-year (YoY) increase in income tax collection for January 2026, largely driven by the recovery of super tax following a landmark ruling by the Federal Constitutional Court, according to provisional data.
Official figures show that the FBR collected Rs489.37 billion in income tax during January 2026, compared to Rs380.61 billion in the same month last year, reflecting a substantial surge of over Rs108 billion.
Sources within the FBR attributed the sharp rise primarily to enhanced recovery of super tax, which gained momentum after the Federal Constitutional Court upheld the legality of Sections 4B and 4C of the Income Tax Ordinance, 2001. These sections govern the imposition of super tax on high-earning individuals and profitable companies.
Last month, the court issued its short order in super tax-related cases, endorsing the levy and clearing legal uncertainties that had delayed its collection. According to an FBR press release, the verdict is expected to generate around Rs300 billion in additional revenue for the national exchequer, significantly strengthening fiscal consolidation efforts.
Tax officials said that the ruling has not only accelerated recoveries from pending cases but also improved tax compliance and enforcement, particularly among large corporate entities and high-net-worth individuals.
Meanwhile, the cumulative income tax collection during the first half (July–December) of fiscal year 2025-26 reached Rs3.56 trillion, up from Rs3.21 trillion recorded in the corresponding period of the previous fiscal year, marking a growth of 11%.
Economists believe that sustained recovery of super tax, coupled with structural tax reforms and improved documentation, could provide critical fiscal space for the government to manage budgetary pressures, reduce reliance on borrowing, and support development spending. However, they caution that maintaining momentum will require consistent policy implementation and continued legal clarity to avoid future revenue disruptions.