FBR projects Rs4.7tr sales tax collection in FY27 on expected recovery in manufacturing, trade

The Federal Board of Revenue (FBR) has projected sales tax collection of Rs4.735 trillion for fiscal year 2026-27, expecting stronger large-scale manufacturing (LSM), higher aggregate demand, and increased trade activity to boost revenue.

According to the FBR's Revenue Forecasting Report 2026-27, sales tax revenue is expected to grow by 9.3% over the previous fiscal year. The report said the forecast is based on anticipated improvements in industrial production, consumption patterns, and import volumes. Given its broad tax base, sales tax remains a stable but economically sensitive source of revenue.

The FBR has also projected direct tax collection at Rs7.366 trillion for FY2026-27, requiring a 14.5% increase from the previous year. The report attributed the higher growth target to the historical buoyancy of income-based taxes, supported by expected expansion in GDP, corporate profitability, and documented economic activity.

It added that the direct tax base is expected to strengthen further through improved tax compliance and enforcement measures.

Meanwhile, customs duty collection has been estimated at Rs1.496 trillion, reflecting expected import growth, exchange rate trends, and the existing tariff structure. The report noted that customs revenue remains vulnerable to global market conditions, trade policies, and balance-of-payments pressures.

The FBR has forecast Federal Excise Duty (FED) collection at Rs902 billion for FY2026-27. According to the report, FED revenue is expected to depend largely on production trends in sectors subject to excise duty and the continuity of existing tax policies.