KARACHI – Defying broader economic headwinds, Karachi has emerged as the powerhouse of Pakistan’s tax machinery, recording an impressive Rs 3.25 trillion in tax revenue during the 2024–25 fiscal year — a nearly 29.5% increase compared to the previous year.
The figures, sourced from the Federal Board of Revenue (FBR) and Sindh Revenue Board (SRB), underscore the city’s outsized role in fueling Pakistan’s public finances, despite persistent inflation, sluggish growth, and fiscal tightening at the national level.
At the heart of this performance is the Large Taxpayers Office (LTO) Karachi, which collected Rs 3.25 trillion, a leap from Rs 2.51 trillion in the previous fiscal cycle. The LTO’s aggressive tax drive culminated in a record-breaking day in June 2024, with Rs 184.7 billion collected in a single day — the highest ever by any tax office in the country.
The month of June closed with a total haul of Rs 449 billion, up 48% from the same month last year, signaling robust corporate compliance and enhanced enforcement.
Breakdown of the tax components reveals strong performance across key categories. Income tax receipts surged by 32% to Rs 798 billion, while sales tax contributions climbed 21% to reach Rs 1.235 trillion. The most significant uptick came from Federal Excise Duty (FED), which rose a staggering 63% year-on-year to Rs 222.2 billion — driven in part by tightened regulations and expanded tax coverage.
It is worth noting that these figures exclude port-related revenues, further highlighting the intrinsic economic capacity of the city itself.
On the provincial front, the Sindh Revenue Board also marked a milestone year, reporting collections of Rs 306.6 billion for FY 2023–24 — a healthy rise from Rs 236.8 billion the previous year. The month of June 2024 proved particularly strong, delivering Rs 40.5 billion — the highest monthly collection in SRB’s history. This represented a 44% increase over June 2023 and a 3% uptick from May 2024.
Speaking on the performance, SRB Chairman Dr. Wasif Ali Memon credited the board’s workforce for their efficiency and acknowledged the consistent support of the Sindh government in enabling the success.
Looking ahead, SRB is gearing up for expanded responsibilities in the new fiscal year beginning July 1, 2025. Among the key challenges is the introduction of agricultural income tax collection — a long-contentious subject in Pakistan’s tax landscape — and the enforcement of a newly defined “negative list” of tax-exempt services.
Economists say Karachi’s continued revenue growth, in the face of national economic instability, not only reflects the city’s resilience but also underlines the need for deeper structural reforms to broaden the tax base and reduce reliance on a single region.
