Provincial revenue mobilisation has risen significantly by April 2026, despite economic headwinds, compounded by the spillover effects of the Iran-Israel/US conflict. Collection appears on track to meet full-year targets, signalling a gradual break from past inertia.
Lean sub-national tax authorities are gaining traction through the use of new digital data tools, targeted enforcement, risk-based compliance, expansion of the tax base via field surveys, and improved audit and assessment mechanisms.
While official consolidation is still pending, responses from revenue authorities of Balochistan, Punjab and Sindh indicate strong performance. All three reported tax collections growing by over 35 per cent in the first 10 months of FY26.
Combined collection for the period stands at Rs599 billion, with Sindh marginally ahead of Punjab — Rs289bn versus Rs285bn respectively — while Balochistan reported Rs25bn in April. A response from the Khyber Pakhtunkhwa Revenue Authority was awaited at the time of filing.
A detailed breakdown of revenue sources, including agriculture income tax, was not shared by the provinces. However, in response to queries on new tax avenues, officials pointed to several under-taxed segments at various stages of documentation.
Cosmetic clinics have been identified by all provinces as a promising revenue source and are currently being registered and assessed. Pet clinics, like many other emerging services that have so far operated under the radar, are yet to be brought into the tax net.
The Rs599bn collection by three provinces is a clear improvement, but is still only a fraction of our true revenue potential
“In DHA Phase 6, Karachi, I counted 25 pet clinics within a two-kilometre radius. Over the past five years, some have grown from single-room setups into multi-storey boutique hospitals, charging freely with little regulatory oversight. The crowds inside and outside suggest booming business. While animals deserve proper care, in a country where millions of children are stunted, and thousands die from preventable diseases like diarrhoea, ignoring such an obvious source of tax revenue is hard to justify,” a former tax officer observed.
Experts view the Rs599bn collection by three provinces as a clear improvement, but it is still only a fraction of the true revenue potential. Pakistan’s large and expanding service sector, along with under-taxed agriculture, continues to shift the burden onto the formal economy, contributing to higher corporate taxes and a heavier load on salaried individuals.
Provincial officials cited cash transactions, links between service providers and powerful quarters, and judicial delays as major factors affecting the pace of progress.
Abdullah Khan, Chairman, Balochistan Revenue Authority (BRA), said revenue mobilisation has grown by 39.5pc this year. “Since BRA’s establishment, collections have risen sharply from Rs1.96bn in FY16 to Rs30.97bn in FY25. In FY26, collections have already reached around Rs25bn by April,” he noted.
He added that under the Negative List regime, several new sectors have been brought into the tax net, including online content creators, intra-city transportation services, motorcycle repair businesses and cosmetic surgeons. The non-formal banking sector is also being explored as a potential source of revenue.
Dr Wasif Ali Memon, Chairman, Sindh Revenue Board (SRB) said about 76pc of the annual revenue target, Rs289bn, had been achieved by the end of April, despite a difficult economic landscape marked by slower activity, austerity measures, higher fuel costs and increased input tax claims.
He attributed the performance to reforms such as the Negative List regime, collection of agricultural income tax, adoption of the UN’s Central Product Classification system to replace HS Chapter 98, resulting in fewer complications and disputes, rationalisation of tax rates and enforcement of sales tax on indenting and distribution following favourable court rulings.
Memon noted that several high-potential sectors remained under-taxed due to litigation, including insurance, construction (post-Federal Constitutional Court judgement), rental income, and marriage halls. Many profitable businesses still operate informally. To address this, the SRB has amended laws to include luxury aesthetic clinics and is considering mandatory point-of-sale systems to curb cash transactions and enable real-time reporting. “Around 330 cosmetics clinics are registered with SRB, generating approximately Rs710 million in revenue up to April.” Such services are taxed at the standard 15pc Sindh sales tax rate.
He added that pet care services are not currently taxable under SRB, while pet foods and accessories fall under the federal tax regime.
Moazzam Iqbal Sipra, Chairman, Punjab Revenue Authority (PRA), said collections reached Rs285bn by April, up from Rs204bn in the same period last year, a 39pc increase, keeping the province on track to meet its Rs340bn annual target despite disruptions, including reduced business activity linked to regional tensions.
He attributed the growth to targeted enforcement, risk-based compliance, expansion of the tax base through field surveys, improved audit and assessment mechanisms, and stronger input tax adjustment analysis.
Enhanced use of data analytics, sector-specific compliance drives, and tight monitoring also supported performance. Public awareness campaigns were rolled out through print and electronic media, alongside initiatives such as invoice verification via the PRA Sahulat App and on-ground taxpayer education in schools and colleges.
“Sector-specific enforcement measures have been undertaken in the cosmetic clinic sector, wherein physical inspections of records have been carried out on the non-compliant businesses,” Sipra added.
Published in Dawn, The Business and Finance Weekly, May 18th, 2026
