Karachi, November 15, 2024 – Pakistan’s provincial governments have collectively gathered Rs 122 billion in sales tax on services during the first quarter (July – September) of fiscal year 2024-25, according to data released by the federal finance ministry.
This marks a 15% increase from the Rs 106.28 billion collected during the same period in the previous fiscal year.
The province of Sindh led the charge, collecting Rs 58 billion, reflecting a growth of 20.25% compared to Rs 48.23 billion in the first quarter of fiscal year 2023-24. Sindh’s strong performance was bolstered by the growing demand for services and efficient tax administration, contributing significantly to the national revenue pool.
Punjab, the country’s most populous province, followed closely behind with Rs 50.86 billion in sales tax on services, up by 8% from Rs 47.03 billion collected in the corresponding period of the previous fiscal year. The growth in Punjab’s tax collection highlights the province’s expanding service sector, particularly in urban areas like Lahore, which have seen rapid economic development.
Khyber Pakhtunkhwa (KP) posted a remarkable 32% increase in its sales tax collection, reaching Rs 9 billion, up from Rs 6.82 billion in the same period last year. This surge is attributed to the province’s expanding infrastructure and services, especially in sectors such as telecommunications and real estate, which have contributed to higher tax revenue.
Balochistan, while the smallest contributor among the provinces, also saw an increase in sales tax collections, amounting to Rs 4.37 billion for the first quarter, up 5.81% from Rs 4.13 billion collected during the same period last year. This modest growth is reflective of the province’s ongoing development initiatives and gradual diversification of its service-based economy.
The overall increase in sales tax on services collected by the provinces is a positive indicator of economic activity, with significant contributions from key sectors such as telecommunications, banking, transport, and real estate. The federal finance ministry’s data also reflects the positive trend in provincial tax collection, demonstrating a more efficient and broad-based tax system in place.
The growth in sales tax revenue will help bolster provincial budgets, providing the necessary funds to support public services and infrastructure development. As Pakistan’s economy continues to recover, the provinces are expected to play a crucial role in driving sustainable fiscal growth.
