The Federal Board of Revenue (FBR) collected Rs810 billion in taxes during July 2026, exceeding its monthly target by Rs30 billion and marking a positive start to the new fiscal year, according to provisional figures.

The collection was 7% higher than the Rs757 billion recorded in July 2025. However, the annual revenue target for FY2027 stands at Rs15.263 trillion, requiring a 17% increase over last year's collections. Meeting this target remains critical, as it is linked to the release of the sixth tranche under Pakistan's IMF programme and provincial commitments to provide over Rs1 trillion in grants for defence and water infrastructure projects.

Sales tax emerged as the strongest contributor during the month, with collections reaching Rs358 billion, exceeding the target by Rs53 billion and registering 18% year-on-year growth. Of the total sales tax collected, around Rs275 billion (78%) came from imports, reflecting the government's continued reliance on import-stage taxation. The government also implemented changes in the latest budget to levy sales tax on market prices instead of factory-gate values for selected goods to reduce tax evasion.

Meanwhile, income tax collection exceeded Rs300 billion, but remained Rs23 billion below target, partly due to advance tax collections made in June and lower withholding tax rates introduced for the salaried class and property transactions. Federal excise duty amounted to Rs48 billion, while customs duty collections reached Rs105 billion, broadly meeting official targets.

Overall, more than Rs440 billion, or 54% of total tax revenue, was collected at the import stage, where compliance levels are relatively higher. During the month, the FBR also received approximately 227,000 income tax returns following the launch of new return forms and processed Rs98 billion in tax refunds, up from the previous year.

Despite the encouraging revenue performance, the FBR has yet to secure cabinet approval for implementing restrictions on high-value purchases by individuals with insufficient declared assets. The proposed measure would bar ineligible taxpayers from purchasing luxury vehicles, high-value properties, large stock investments and significant cash withdrawals unless supported by declared financial resources, but the proposal remains pending after being turned down by the federal cabinet.