Karachi, February 20, 2026 – Karachi, Pakistan’s financial and commercial hub, has generated over Rs15 billion in advance income tax collected through electricity bills during the first seven months (July to January) of fiscal year 2025-26, according to data from the Federal Board of Revenue (FBR).
Despite this substantial revenue, the collection fell by 26% compared to Rs20.58 billion recorded during the same period in the previous fiscal year. In January 2026 alone, the advance income tax collected through electricity consumption dropped 6%, amounting to Rs2.46 billion, down from Rs2.63 billion in January 2025.
The FBR collects advance income tax on electricity consumption under Section 235 of the Income Tax Ordinance, 2001, while K-Electric Limited, the sole electricity provider for Karachi, is responsible for collecting the tax on behalf of the FBR.
Officials attributed the decline to several factors, including reduced electricity tariffs, slower economic activity, and an increasing shift toward alternative energy sources like solar and wind, which have decreased the overall electricity consumption billed in the metropolis.
Despite the fall, Karachi continues to be a major contributor to the FBR’s revenue collection, highlighting the city’s pivotal role in Pakistan’s economy. Authorities emphasize the need for sustained economic growth and strategic energy planning to maintain and boost tax revenues from the electricity sector in the coming fiscal periods.
With ongoing reforms and awareness campaigns, officials hope to streamline advance tax collection and minimize revenue shortfalls in future months.