ISLAMABAD: In a remarkable fiscal performance, Karachi has emerged as the leading city in revenue collection for 2024-25, registering unprecedented growth in both federal and provincial tax receipts despite economic challenges.

Federal tax collection in Karachi rose by 29 per cent year-on-year, while the Sindh Revenue Board (SRB) recorded a 29.5pc increase in sales tax on services. The city retained its status as the largest contributor to national and provincial revenue.

The SRB collects General Sales Tax (GST) on services, while five offices of the Federal Board of Revenue (FBR) — RTO-1, RTO-2, Medium Tax­payers Office (MTO), Corporate Tax Office (CTO), and Large Taxpayers Office (LTO) — handle income tax, sales tax on goods, and Federal Excise Duty (FED) within Karachi.

According to estimates, 80pc of SRB’s GST collection originates from Karachi, with the remaining 20pc from interior Sindh. However, even when operations are based outside the city, taxes are still collected at the company headquarters in Karachi.

LTO and SRB report historic highs in income tax and GST on services in FY25

LTO Karachi performance

The Large Taxpayers Office (LTO) Karachi collected Rs3.256 trillion in FY25, up from Rs2.515tr in the previous year — an increase of 29.46pc.

The LTO Karachi also collected record Rs184.7bn in one day with overall collection of Rs449.05bn in June, registering a growth of 48pc year on year. The LTO chief commissioner attributed this performance to a committed and professional team.

Income tax collection reached Rs1.798tr in the outgoing fiscal year, up 32pc from Rs1.360tr a year ago.

Sales tax grew by 21pc to Rs1.235tr from Rs1.018tr, while FED rose sharply by 63pc to Rs222.2bn from Rs136.3bn.

The figures do not include taxes collected via port operations, further underscoring Karachi’s economic importance.

SRB collection

The Sindh Revenue Board collected Rs306.6bn in the fiscal year 2024-25, up from Rs236.8bn in FY24. Despite low inflation and modest economic growth, the provincial tax authority maintained double-digit growth. In June alone, SRB collected Rs40.5bn — its highest-ever monthly total — up 44pc from Rs28.1bn in June FY24 and 3pc higher than May FY25.

SRB Chairman Dr Wasif Ali Memon credited the surge to the dedication of the SRB workforce, political backing from the Sindh government, and cooperation from taxpayers.

He noted that SRB is preparing to meet new challenges in FY26, including the collection of Agricultural Income Tax (AIT) and implementation of a Negative List Tariff regime for sales tax on services, set to begin on July 1, 2025.

Published in Dawn, July 2nd, 2025