Islamabad, August 7, 2025 – The provinces of Pakistan collectively reported a tax-to-GDP ratio of just 0.9% for the fiscal year 2024-25, reflecting modest growth in tax revenue despite a significant increase in the size of the national economy.
According to official data released by the federal Ministry of Finance, the four provinces managed to collect a combined total of Rs978.62 billion in tax revenue during FY2024-25. This marks a notable improvement from Rs774.20 billion collected in the previous fiscal year (FY2023-24).
The country’s Gross Domestic Product (GDP) was recorded at Rs114.70 trillion in FY2024-25, up from Rs106.05 trillion in the preceding year. Based on this, the tax-to-GDP ratio for the provinces improved slightly, rising from 0.7% in FY2023-24 to 0.9% in FY2024-25.
A closer look at the revenue breakdown shows that sales tax on services remained the largest source, with collections rising to Rs612.42 billion from Rs504.62 billion. Excise duty collections increased to Rs13.37 billion from Rs12.14 billion.
The provinces also saw growth in stamp duty, which rose to Rs66.46 billion compared to Rs62.55 billion previously. Motor vehicle tax collections surged to Rs53.25 billion from Rs34.11 billion, showing improved compliance and enforcement. Under the “others” category, revenue reached Rs231.60 billion, slightly higher than Rs223.12 billion. Despite improvement, the ratio remains low compared to national targets.