The Federal Board of Revenue (FBR) has collected Rs3,083.5 billion in the first quarter of fiscal year 2026-27, exceeding its quarterly target of Rs3,053 billion by around Rs30 billion, according to provisional figures.

The collection is 7 percent higher than the Rs2,889 billion recorded during the same period last year, despite several income tax rates being reduced from July 1.

FBR’s gross collection before refunds reached Rs3,286.7 billion, compared with Rs3,047 billion a year earlier, showing growth of around 8 percent.

September also ended above target, with net collection reaching Rs1,360.7 billion against a target of Rs1,343 billion. The monthly collection was around 11 percent higher than the Rs1,229 billion recorded in September 2025.

Refunds also increase

The higher tax collection was accompanied by a rise in refunds.

FBR issued Rs203.2 billion in refunds during the July to September period, compared with Rs159 billion in the same period last year.

Sales tax refunds increased to Rs130 billion from Rs112 billion, while income tax refunds climbed to Rs51 billion from Rs32 billion.

September refunds stood at Rs47 billion, up from Rs35 billion a year earlier.

Income tax grows despite cuts

Income tax remained FBR’s largest source of revenue, with net collection rising 5 percent to Rs1,437 billion from Rs1,365 billion.

However, the collection remained slightly below the head-wise target.

The slower growth followed tax relief introduced in the federal budget. Income tax rates for several salaried income brackets were reduced, while the 9 percent surcharge on salaried individuals earning more than Rs10 million was abolished.

The government also removed super tax slabs for businesses earning between Rs150 million and Rs500 million and reduced the rate for income above Rs500 million from 10 percent to 8 percent for most sectors.

Withholding tax on property transactions was also reduced.

Sales tax leads revenue growth

Sales tax provided the biggest boost to overall revenue during the quarter.

Net sales tax collection increased 11 percent to Rs1,137 billion from Rs1,020 billion last year. The collection was around 8 percent above its quarterly target.

Gross sales tax collection rose 12 percent to Rs1,266 billion from Rs1,131 billion.

Of the roughly Rs194 billion increase in FBR’s net collection compared with last year, sales tax accounted for around Rs117 billion, while income tax contributed approximately Rs72 billion.

Officials have attributed the increase in sales tax collection to stronger enforcement and digital monitoring of production and sales.

Federal excise duty collection increased 3 percent to Rs197 billion and remained broadly in line with the target. Customs duty collection stood at Rs312 billion, largely unchanged from last year and slightly below target.

Tax return filing jumps

The revenue performance comes as the number of income tax return filers has increased sharply.

By September 30, taxpayers had filed 5,767,384 income tax returns compared with 3,980,692 by the same date last year, representing growth of nearly 45 percent.

Returns filed by non-salaried individuals, including traders and professionals, increased by 60 percent.

The number of returns showing income above the taxable threshold rose 37 percent to nearly 2.5 million, while taxpayers paying tax with their returns increased 38 percent to 3.35 million.

The filing deadline has also been extended, which could further increase the number of returns.

Rs15.264 trillion annual target

FBR has been assigned an annual revenue target of Rs15.264 trillion for fiscal year 2026-27.

The first-quarter performance comes as the government continues its FBR reform program, with measures focused on enforcement, digital monitoring, data integration and changes to the tax assessment process.

FBR collected more than Rs13 trillion during fiscal year 2025-26, exceeding its revised target of Rs12.957 trillion.

The latest figures are provisional and will be finalized after completion of the first-quarter accounts.