FBR’s largest tax office posts record net revenue as direct taxes, sales tax and Federal Excise Duty collections register strong growth despite economic challenges.
KARACHI: The Large Taxpayers Office (LTO) Karachi has achieved its highest-ever net tax collection, generating Rs3.61 trillion during fiscal year 2025-26, according to official documents.
The Federal Board of Revenue’s (FBR) largest revenue-generating office recorded an 11 percent increase in net revenue collection compared with Rs3.26 trillion collected in FY2024-25, despite slower economic activity and supply chain disruptions caused by geopolitical tensions in the Middle East.
Gross collection reaches historic high
LTO Karachi also posted a record gross tax collection of Rs3.75 trillion during FY2025-26, up 11 percent from Rs3.39 trillion collected in the preceding fiscal year.
The office issued more than Rs141 billion in refunds and tax adjustments during the year, compared with Rs125 billion in FY2024-25, reflecting an increase of 13 percent.
Direct tax collection records robust growth
Direct taxes remained the largest source of revenue growth during the fiscal year.
Net direct tax collection increased by 17 percent to Rs2.11 trillion, compared with Rs1.80 trillion in the previous fiscal year.
LTO Karachi also released more than Rs58 billion in direct tax refunds, facilitating taxpayers while maintaining strong revenue performance.
Sales tax collection remains resilient
Despite a slowdown in economic activity, the office collected Rs1.26 trillion in sales tax during FY2025-26, slightly higher than the Rs1.24 trillion collected in the previous year.
To support businesses facing challenging economic conditions, LTO Karachi significantly increased sales tax refunds, disbursing more than Rs83 billion during the fiscal year, compared with Rs66 billion in FY2024-25, an increase of 26 percent.
Federal Excise Duty collection rises
Collection under the Federal Excise Duty (FED) also posted healthy growth.
The office collected Rs241 billion in FED during FY2025-26, compared with Rs223.53 billion in the preceding fiscal year.
Strong performance in June
LTO Karachi ended the fiscal year on a strong note, collecting Rs528 billion in June 2026, compared with Rs450 billion in June 2025, representing year-on-year growth of 17 percent.
As the FBR’s largest revenue-generating office, LTO Karachi’s record-breaking performance played a pivotal role in strengthening Pakistan’s tax revenues during FY2025-26, underscoring the resilience of the country’s tax administration despite economic headwinds and regional geopolitical uncertainties.