The Khyber Pakhtunkhwa Revenue Authority (KPRA) has reported a significant increase in its Sales Tax on Services (STS) revenue during the first quarter of the financial year 2026-27, reflecting stronger tax collection and improved compliance across the province.
According to figures released by the authority, KPRA collected Rs12.66 billion in Sales Tax on Services between July and September, marking a 24% increase compared with the Rs10.2 billion collected during the same period last year.
When the Infrastructure Development Cess (IDC) is included, the authority’s total collection from the two revenue streams stood at Rs13.123 billion during the quarter.
September Records Stronger Tax Collection
The upward trend was particularly visible in September. KPRA’s Sales Tax on Services revenue reached Rs4.65 billion during the month, registering a year-on-year increase of 35%.
The figures indicate that the authority has been able to strengthen its core revenue collection despite challenges affecting some other sources of income.
KPRA’s performance also highlights the growing contribution of services-related taxation to the provincial revenue base. Better collection mechanisms, greater taxpayer participation and continued administrative efforts appear to have contributed to the improvement.
Border Closures Affect Infrastructure Cess
While sales tax revenue posted healthy growth, collections from the Infrastructure Development Cess faced pressure during the quarter.
KPRA collected approximately Rs457 million through the IDC between July and September. The authority attributed the weaker performance in this area to the closure of Pakistan-Afghanistan border crossings.
The disruption affected cross-border commercial activity, ultimately reducing the volume of trade on which the infrastructure cess is collected.
KPRA Credits Revenue Growth to Reform Efforts
KPRA Director General Irum Naz welcomed the increase in the authority’s core tax receipts and credited the performance to the efforts of KPRA’s officers and officials.
She also acknowledged the support of Khyber Pakhtunkhwa Chief Minister Muhammad Sohail Afridi and Adviser to the Chief Minister on Finance Muzzammil Aslam for their role in strengthening the authority and supporting ongoing revenue reforms.
The authority has also emphasized the importance of cooperation from taxpayers. According to KPRA, voluntary compliance remains a key element in improving revenue collection and building a more effective tax system.
A Positive Start to FY27
The first-quarter figures provide an encouraging start to KPRA’s revenue performance for FY27. A 24% rise in Sales Tax on Services collection suggests that the authority is making progress in expanding its tax base and improving collection efficiency.
However, the decline in infrastructure cess receipts demonstrates how external factors, particularly disruptions to regional trade, can affect provincial revenue streams.
Going forward, maintaining the momentum in STS collection while addressing challenges affecting other revenue sources will be important for KPRA as it seeks to strengthen Khyber Pakhtunkhwa’s fiscal position.