Abdul Ghani

Pakistan achieved a historic fiscal milestone as total revenue surpassed Rs10 trillion during the first half of FY2025-26, according to a document available with Wealth Pakistan. Total revenue during July–December 2025 reached Rs10,683.6 billion, marking a 72% increase from Rs6,199.7 billion recorded in the previous quarter.

The record growth was primarily driven by strong performance in the tax sector, with federal tax revenue rising to Rs6,160.8 billion from Rs2,884 billion in July–September 2025. Sales tax, direct taxes and customs duties posted substantial gains, reflecting improved economic activity and stronger enforcement measures.

Sales tax alone grew by 105%, indicating the government’s success in broadening the tax base and enhancing compliance. Non-tax revenues also registered a notable increase, climbing to Rs3,954.2 billion from Rs2,984.5 billion in the previous quarter. The rise was largely supported by higher surplus profits transferred by the State Bank of Pakistan and increased collections from petroleum levies.

Despite record-breaking revenue performance, the federal government’s expenditure surged by 137% to Rs9,591.1 billion, mainly due to mounting debt servicing obligations.

Although the sharp rise in revenue signals improving fiscal momentum, managing expenditures, particularly interest payments on domestic and external debt, remains a key challenge. Sustained cost control alongside continued revenue growth will be essential to ensure long-term fiscal stability.

At the provincial level, Punjab and Sindh led the recovery, posting strong revenue growth during the period. Punjab’s tax revenues reached Rs225 billion, while Sindh collected Rs279.868 billion in July–December 2025.

Credit: INP-WealthPk