Islamabad, November 6, 2025 — It’s a jackpot moment for the Federal Board of Revenue (FBR)! Thanks to recent tax law changes, the authority has recorded a remarkable 23% jump in withholding tax collection from exports during the fiscal year 2024–25, signaling stronger revenue performance and improved compliance.
According to the FBR’s Annual Report 2024–25, the tax collected from export proceeds surged to Rs122.27 billion, up from Rs98.97 billion in FY24. That’s an impressive Rs23 billion increase, reflecting the impact of targeted reforms introduced through the Finance Act, 2025.
So, what changed? The boost comes from a new provision — sub-section (6C) added to Section 147 of the Income Tax Ordinance, 2001, under the Finance Act, 2024. This clause mandates withholding agents listed under Section 154 to deduct or collect an additional 1% advance tax on export-related transactions. These include:
• Realization of foreign exchange proceeds
• Sale or export of goods
• Payments to indirect exporters
• Clearance of export consignments
In simple terms, the 1% extra tax adds to the existing 1% minimum tax, effectively doubling the withholding rate to 2% on export proceeds.
📊 Why it matters:
FBR officials say the move is a game-changer — it will boost transparency, expand the tax base, and ensure fair revenue collection from Pakistan’s export-driven economy. The reform also aligns with efforts to modernize tax compliance and reduce leakages across key sectors.
With export volumes rising and fiscal reforms taking root, the FBR’s latest figures show that Pakistan’s tax machinery is finally gaining momentum.