FBR collects record Rs2b in wedding taxes

A significant rise has been recorded in tax collection from wedding ceremonies across the country, as authorities intensify efforts to ensure the collection of withholding tax on such events.

According to documents of the Federal Board of Revenue (FBR), during the fiscal year 2024-25, withholding tax deductions from weddings increased by 19 percent, alongside improved documentation in the event management sector.

The FBR reported that Rs2.02 billion was collected in fiscal year 2024-25 as withholding tax on weddings, compared to Rs1.70 billion in the previous fiscal year, reflecting an increase of around Rs500 million, mainly due to stricter monitoring. The documents further reveal that wedding-related spending surged sharply in the three major cities - Karachi, Lahore, and Islamabad.

Under Section 236CB of the Income Tax Ordinance, 2001, the FBR collects taxes from wedding halls, marquees, and hotels. Advance tax is also charged on events held at restaurants, clubs, and community centres.

Additionally, the documents show that taxes are also being collected on catering, decoration, and other services linked to wedding events.

According to the report, a 10 percent withholding tax applies to individuals listed on the Active Taxpayers List, while non-filers are charged 20 percent. This tax can be adjusted against the annual tax liability of filers.

FBR officials said the drive to monitor wedding ceremonies aims to bring undocumented sectors into the tax net. They noted that the wedding industry generates substantial income, but much of it remains outside formal taxation.

Officials added that given the extravagant spending on weddings, the sector holds strong potential to become a consistent revenue source for the government.