ISLAMABAD: The Federal Board of Revenue (FBR) collected Rs490 billion in taxes through electricity bills during fiscal year 2024–25, marking a significant decline of Rs110 billion compared to Rs600 billion in the previous year, official sources confirmed on Saturday.
This decline in revenue from General Sales Tax (GST) and Withholding Tax (WHT) on electricity consumption is being attributed to multiple factors. Officials believe a growing shift among consumers toward rooftop solar installations has reduced dependency on the national grid. Additionally, weaker industrial activity, caused by sluggish or negative economic growth, also contributed to lower electricity consumption and thus lower tax collection.
According to the Economic Survey 2024–25, electricity consumption during the July–March period fell to 80,111 GWh from 83,109 GWh in the corresponding period of the previous fiscal year—a 3.6% decrease. The survey cites energy conservation efforts, high power tariffs, adoption of off-grid solar solutions, and reduced industrial output as key reasons behind the decline.
Despite the overall drop, household electricity usage rose slightly. The residential sector accounted for 49.6% of total consumption (39,728 GWh), up from 47.3% (39,286 GWh) in the same period of FY24. This shift reflects increased demand in homes, likely due to population growth, expanded use of appliances, and consistent consumption trends driven by seasonal patterns. Conversely, industrial consumption saw a sharp drop—from 28,830 GWh in FY24 to just 21,082 GWh in FY25.
In contrast to electricity-based collections, the FBR recorded strong performance in other tax categories. From salaried individuals, Rs552 billion was collected—an increase of Rs185 billion from Rs367 billion in FY24. Real estate transactions also generated higher revenue, with Rs235 billion collected under Sections 236C and 236K. Of this, Rs118 billion came from tax on property sales (236C), and Rs117 billion from tax on purchases (236K), up from Rs90 billion and Rs104 billion respectively in the previous fiscal year.
The FBR reported total direct tax collection at Rs5.8 trillion in FY25. Officials stated that the corporate sector contributed the lion’s share, with approximately Rs3.8 trillion, while the banking sector paid between Rs1 trillion and Rs1.5 trillion in income and withholding taxes. The average tax rate for the banking sector remained around 55%.
Looking ahead, FBR officials stressed the need for stricter enforcement to meet the ambitious tax collection target of Rs14.131 trillion set for fiscal year 2025–26. Without significant improvements in compliance and recovery, meeting this goal will be difficult, they warned.
