FBR to miss May tax target by PKR 190B, FY26 shortfall nears PKR 860B

Pakistan's tax collection authority is set to miss its May 2026 tax collection target by around PKR 190 billion, according to official sources.

The shortfall would push the cumulative gap for the first 11 months of FY26 to nearly PKR 860 billion, intensifying pressure on the government ahead of next week's budget.

How much did Pakistan's FBR collect in May 2026?

The Federal Board of Revenue (FBR) has collected about PKR 960 billion in May 2026 against a monthly target of PKR 1.15 trillion.

An additional PKR 5 billion expected on May 31 would lift the total to around PKR 965 billion, still nearly PKR 190 billion short. The FBR has not yet released final May figures.

The cumulative tax shortfall for July through May of FY26 could reach about PKR 860 billion.

How does the May shortfall compare with March and April?

The May miss extends a pattern of recurring monthly shortfalls.

In March, the FBR fell short by PKR 187 billion, collecting PKR 1.18 trillion against a target of PKR 1.37 trillion.

In April, the gap narrowed to PKR 72 billion as the FBR collected PKR 956 billion against a target of PKR 1.03 trillion. April collections still rose 13% year-on-year.

The 10-month cumulative shortfall for July-April stood at PKR 683 billion, with the FBR collecting PKR 10.26 trillion. The IMF has refused to lower the full-year target of PKR 13.98 trillion.

Why has Pakistan's tax collection been weak?

The government has relied on enhanced tax administration and enforcement efforts to lift revenue. Collections have remained below targets amid economic challenges and slower-than-expected growth in taxable activity.

Sales tax has been the largest drag, falling short by PKR 382 billion in July-April. Income tax was missed by PKR 210 billion, and customs duties by PKR 79 billion.

The IMF has tied approval of its third program review, including the release of about $1.2 billion in loan tranches, to Pakistan recovering PKR 322 billion stuck in tax litigation.

What new taxes are expected in Pakistan's FY27 budget?

Pakistan may impose up to PKR 378 billion in new taxes in the FY27 budget. A brokerage report by Arif Habib Limited identified retailers, fuel, tobacco, and digital businesses as likely targets.

The single largest measure could be PKR 199 billion from bringing retailers and wholesalers into the income tax net. A proposed green levy on petroleum products could add PKR 65 billion.

Higher excise on tobacco could yield PKR 51 billion, and sugary drinks PKR 18 billion. A 1% digital services tax could generate PKR 11 billion.

What is Pakistan's FY27 tax target?

The IMF has projected FBR tax revenues at PKR 15.26 trillion for FY27.

That represents a 14% increase over the revised FY26 target.

Without new measures, Arif Habib estimates nominal growth would lift FBR revenue by about PKR 1.76 trillion. With the proposed measures, revenue could reach PKR 15.66 trillion.

Under a more conservative scenario, the FBR could still face a shortfall of about PKR 505 billion against the FY27 target.