Karachi retailers paid Rs6.25 billion in income tax during fiscal year 2024-25, reflecting a sharp rise in revenue collection, according to data released by the Federal Board of Revenue. The figures show a 121% increase compared to Rs2.83 billion collected in FY24, indicating stronger compliance and improved enforcement across the retail sector.
Officials at the Large Taxpayers Office Karachi linked the surge in collections to enhanced monitoring and stricter regulatory measures. Authorities intensified oversight of manufacturers and importers to ensure accurate reporting of sales to retailers, significantly boosting withholding tax recovery.
The Federal Board of Revenue collects advance tax from retailers under Section 236H of the Income Tax Ordinance, 2001, where manufacturers, distributors, wholesalers, and importers deduct tax at the time of sale to retailers. This tax is adjustable against the retailer’s final liability, making the system an effective tool for documentation and compliance in the retail economy.
Data shows that multiple tax offices in Karachi recorded notable increases in collections during FY25. The Large Taxpayers Office collected Rs1.61 billion compared to Rs837 million in FY24, while the Corporate Tax Office generated Rs403 million, up from Rs186 million. Regional Tax Office-I reported Rs1.73 billion against Rs647 million last year, the Medium Tax Office collected Rs716 million compared to Rs478 million, and Regional Tax Office-II posted Rs1.80 billion, rising from Rs676 million.
Karachi’s tax offices contributed around 16.5% of the total income tax collected from retailers nationwide, underlining the city’s key role in Pakistan’s retail landscape. Authorities expect collections to grow further as enforcement continues and documentation of the retail sector expands across the country.
