Wedding tax collection sees huge rise as FBR collects R 2.02bn

Islamabad: Despite being a poor country, Pakistanis have big hands on expenditures on marriages as the Federal Board of Revenue (FBR) has revealed that its cut of withholding tax on expenditures on marriages went up by 19 percent in the financial year 2024-2025.

According to the FBR, it earned a whopping amount of Rs 2.02 billion from receiving withholding tax on marriages expenditures in the last financial year.

A substantial increase in taxes is the result of the FBR strict overseeing while it also disclosed that spending on marriages have gotten uptick in the country.

Under the FBR strict radar, the tax collection is being done from marriages halls, banquets,  marquees and hotels across the country.

The FBR apprised that an advance tax is being collected from marriage ceremonies held in restaurants, clubs, community centers,

The taxes are also received from eatery, decorations and other related services on the wedding occasions, the FBR adds.

It further apprised that a 10 percent tax is imposed on the persons included in an active tax list while non-filers are bound to pay a 20 percent withholding tax on marriages.

Moreover, an annual tax of tax filers can be adjusted with a responsibility, the FBR stated.

The purpose of strictness on the tax receiving on the marriages is to regularize undocumented fields.

Earlier, previous year, the FBR had imposed a withholding tax on wedding halls, which will be collected separately from the booking party, not the hall owners.

A 10% withholding tax will be charged to the booking party for hosting the event at the wedding hall.

This decision was made under the guidance of FBR officials, and the tax would be added on top of the wedding hall’s rent. While the withholding tax is unrelated to the wedding hall owners.

Pakistan’s tax revenue witnessed a major setback due to the recent floods, with the Federal Board of Revenue (FBR) recording a shortfall of Rs156 billion in September alone.

According to data, the FBR fell short of its first-quarter (July–September) target by Rs199 billion. Against the set target of Rs3,083 billion, collections stood at Rs2,885 billion during the quarter.

During this period, the FBR also issued refunds worth Rs157 billion.

In terms of collections, Rs1,395 billion came from income tax, Rs1,130 billion from sales tax, Rs190 billion from federal excise duty, and Rs324 billion from customs duty.

Sources said that the floods caused an estimated loss of at least Rs60 billion in tax revenue.