Islamabad, May 10, 2025 – Sindh has emerged as the top-performing province in Pakistan in terms of sales tax collection on services during the first nine months (July–March) of the current fiscal year 2024–25, showcasing a robust growth of 25%.
According to official data released by the federal Ministry of Finance, Sindh collected Rs195 billion in sales tax on services, significantly higher than the Rs155.57 billion collected during the same period last year.
This outstanding performance places Sindh well ahead of the other provinces, which have struggled to achieve similar momentum, despite having autonomous revenue authorities empowered to collect sales tax on services. The province’s consistent efforts in strengthening tax administration and widening the services tax net are seen as key factors contributing to this growth.
Across Pakistan, the aggregate collection of sales tax on services by all provinces reached Rs417 billion during the nine-month period, representing an 18% increase over the Rs353 billion collected in the same period of the previous fiscal year. However, this growth is uneven across provinces.
Punjab recorded a more modest growth of 13%, collecting Rs176 billion in sales tax on services during July–March FY2024–25, up from Rs156 billion last year. In contrast, Khyber Pakhtunkhwa posted a much smaller increase of just 8.49%, collecting Rs29 billion compared to Rs26.73 billion the year before. Balochistan showed a slightly better performance, with a 14.80% growth, collecting Rs17.22 billion versus Rs15 billion in the corresponding months of FY2023–24.
Despite the increase in absolute terms, Pakistan continues to face significant challenges in improving its tax-to-GDP ratio. Sales tax on services—though a crucial revenue stream for provincial governments—still accounts for just 0.3% of GDP, reflecting stagnation in relation to economic growth.
The leadership demonstrated by Sindh in mobilizing revenue from the services sector could serve as a model for other provinces. Improved enforcement, transparency, and expansion of the services tax base across provinces will be vital to ensuring sustainable revenue generation in the long run.