Karachi, March 23, 2025 – The collection of sales tax on imports witnessed a significant 30% surge in February 2025, offering a much-needed boost to the Federal Board of Revenue (FBR) in its revenue collection efforts.
This sharp rise in sales tax on imports highlights an increase in overall import activity, which in turn has contributed to a higher demand for the dollar, potentially exacerbating balance of payment concerns.
According to data from tax authorities in Karachi, sales tax collection on imports stood at Rs 67 billion in February 2025, marking a notable increase from Rs 51 billion collected in the same month of the previous year. The sharp rise in sales tax collection signals increased import volumes, further impacting the country’s economic landscape.
Figures released by the Pakistan Bureau of Statistics reveal that the nation’s import bill rose by 12% in February 2025, reaching $4.81 billion compared to $4.31 billion in February 2024. This increase in imports has fueled higher sales tax revenue, but it also poses challenges for the country’s foreign exchange reserves and trade balance.
For the first eight months of the current fiscal year (July–February), the overall sales tax collection on imports climbed by 13%, totaling Rs 527 billion compared to Rs 466 billion in the same period of the previous fiscal year. This upward trend in sales tax collection is largely attributed to rising imports, which continue to shape Pakistan’s economic outlook.
Simultaneously, the country’s total imports for the July–February period reached $37.86 billion, reflecting a 7.60% increase from $35.20 billion recorded in the corresponding period of the previous fiscal year. The continuous growth in imports has bolstered sales tax revenue but also raised concerns over the widening trade deficit and increased reliance on foreign exchange reserves.
While the surge in sales tax on imports helps strengthen domestic revenue generation, policymakers must address the growing import bill and its potential impact on the country’s balance of payments. Striking a balance between revenue collection and sustainable import levels remains a critical challenge for economic stability in Pakistan.