Islamabad, February 22, 2025 – Tax collection from retailers has witnessed an unprecedented increase of 98% during the first seven months (July – January) of the ongoing fiscal year 2024-25, according to sources from the Federal Board of Revenue (FBR). This significant rise highlights the growing tax compliance and enforcement measures implemented in recent months.
The FBR reported a collection of Rs 19.45 billion from retailers in the first seven months of FY25, a substantial increase from Rs 9.80 billion recorded in the same period last year. This surge is largely attributed to the broader coverage of tax regulations introduced in the latest budget.
The tax is collected under Section 236H of the Income Tax Ordinance, 2001, which mandates withholding tax on retailers at varying rates. The application of Section 236H was extended across all sectors of the economy, with rates set at 0.1% and 0.5% for tax filers, while non-filers are subject to higher rates of 2% and 2.5%. These changes have significantly bolstered revenue collection.
FBR sources noted that increased digitization and monitoring of retailers have also played a vital role in enhancing tax compliance. The expansion of the tax net has encouraged more businesses to register and fulfill their tax obligations, further boosting collections.
Additionally, the amendments in tax regulations have positively impacted other sectors, particularly wholesalers. The FBR successfully collected Rs 13.77 billion from wholesalers in the same period, reflecting a 144% increase compared to Rs 5.64 billion in the corresponding period of the previous fiscal year. This growth mirrors the trends seen in tax collection from retailers, showcasing the effectiveness of recent policy measures.
Industry experts believe that the steady rise in tax collection from retailers will contribute to economic stability and increased fiscal revenue. They emphasize that continued efforts in enforcement and digital integration will further strengthen the tax collection framework, ensuring sustained growth in future collections.
The FBR remains committed to expanding its revenue base, particularly within the retailers sector, to meet its fiscal targets and enhance the overall economic landscape. These developments mark a crucial step towards greater tax compliance and economic formalization.