The performance signals a positive trajectory for the remainder of FY2026, driven largely by gains in direct taxation and steady improvement in indirect taxes.

“This month’s tax performance reveals a nuanced and strategically significant fiscal outcome, characterised by a substantial increase in direct taxation, modest growth in indirect and excise streams, and an overall healthy and improved performance in January 2026. It also reinforces the credibility of reform-driven revenue mobilisation and transformation plan of the FBR,” the FBR said in a press release.

Income tax collection rose sharply to Rs483 billion, up from Rs381 billion a year earlier, marking a 26% year-on-year increase.

The FBR said the improvement reflected structural reforms, stronger enforcement, and coordinated efforts to unlock revenues tied up in litigation.

Sales tax collection reached Rs360 billion in January, compared with Rs322 billion last year, showing 12% growth. The uptick mirrors a recovery in large-scale manufacturing, which the FBR described as a positive and encouraging development.

January’s results, the FBR said, validate its reform-led transformation strategy. Through digitalisation and targeted enforcement, it aims to improve compliance, expand the tax base, and strengthen taxpayer trust.

The stronger performance in direct taxes suggests a shift toward greater voluntary compliance, with potential gains in the coming months.

Cumulatively, the FBR collected Rs7.176 trillion in the first seven months of FY2026, up from Rs6.490 trillion in the same period last year.

The authority expressed optimism that continued recovery in large-scale manufacturing would support the achievement of annual revenue targets.

“Team FBR is fully committed to continuing this momentum of growth in the remaining months,” it said.