Pakistan’s top-listed companies contributed Rs1.22 trillion in direct taxes during the calendar year 2024, reflecting a 2.2% increase year-on-year (YoY) and accounting for 23.6% of the country’s total direct tax revenue.Â
According to a news report, the auto assembly sector saw the highest surge, with a remarkable 62% increase in tax contributions, followed by the fertiliser sector (19%), investment banks (15%), commercial banks (12%), textiles (10%), and cement (9%).
Despite the growth in overall tax revenue, the government revised its fiscal year 2025 (FY25) tax target downward to Rs12.35 trillion from Rs12.97 trillion, following negotiations with the International Monetary Fund (IMF). Direct tax collections for FY24 reached Rs5.16 trillion, a 33% increase YoY, with overall tax revenues rising by 27% to Rs10.47 trillion.
In the first half of FY25, direct tax collections totaled Rs2.78 trillion, reflecting a 29% YoY growth. The KSE-100 index companies contributed Rs687 billion, which accounted for 24.71% of total direct tax collections, showing a 10% YoY increase.
However, not all sectors experienced growth. The refinery sector saw the steepest decline in tax contributions, dropping by 47%, followed by chemicals at 30%, Oil Marketing Companies (OMCs) at 27%, and Exploration and Production (E&P) firms at 18%.
The banking sector, impacted by a series of tax policy changes, saw a 12% increase in tax contributions in 2024, despite the revised corporate tax rate for banks increasing from 49% to 54%, which included a 10% super tax.
In the E&P sector, the 35% YoY rise in tax contributions for the first half of FY25 was mainly attributed to the absence of a key tax benefit that was available in FY24.Â
The fertiliser sector, benefiting from increased urea and DAP prices, experienced a 19% increase in tax contributions, while the cement sector saw a solid 34% YoY growth due to lower interest rates.
On the other hand, OMCs’ tax contributions declined by 10% due to lower retail prices of motor spirit (MS) and high-speed diesel (HSD), reducing revenues and tax obligations.
Despite some sectoral challenges, KSE-100 companies remain integral to Pakistan’s tax revenue, and the ongoing changes in government policies and macroeconomic conditions will continue to shape sectoral contributions in the months ahead.
