FBR tax collection PKR 314B less than target in five months

Pakistan’s Federal Board of Revenue (FBR) missed both its original and revised revenue targets for the July-November period, falling short by hundreds of billions of rupees, according to official documents released this week.

The FBR collected PKR 4.73 trillion during the first five months of the fiscal year, registering a shortfall of PKR 412 billion against the original target of PKR 5.143 trillion. Based on the revised target, the revenue gap narrowed but remained significant at PKR 314 billion.

In November, the tax authority collected PKR 896 billion, falling PKR 139 billion short of the month’s original target of PKR 1.04 trillion. Against the revised target of PKR 995 billion, the monthly shortfall stood at nearly PKR 96 billion.

Documents show that income tax, sales tax and federal excise duty all underperformed during the July-November period. The FBR collected PKR 2.23 trillion in income tax against an actual target of PKR 2.37 trillion, while sales tax collection reached PKR 1.88 trillion, below the PKR 1.93 trillion target.

Federal excise duty collection totaled PKR 326 billion, meeting the revised target but falling slightly short of the original projection of PKR 332 billion.

Customs duty, however, surpassed expectations, generating PKR 548 billion during the period and exceeding both the original and revised targets of PKR 519 billion.

In November, the FBR collected PKR 403 billion in income tax against a target of PKR 439 billion, and PKR 364 billion in sales tax compared with a target of PKR 369 billion. Federal excise duty collections totaled PKR 64 billion, slightly below the PKR 67 billion target, while customs duty receipts reached PKR 108 billion against a target of PKR 112 billion.

The FBR also issued PKR 255 billion in refunds during the five-month period, including PKR 48 billion disbursed in November.

Analysts say the revenue shortfall reflects a mix of economic and administrative pressures. Weaker domestic demand—driven by high inflation, elevated interest rates and reduced industrial output—has dented sales tax and excise duty collections. Import compression, partly due to tight foreign exchange controls, has also limited customs and sales tax inflows from imported goods.

They add that ongoing structural challenges — including tax evasion, a narrow tax base and delays in enforcement and audit measures — continue to constrain income tax growth. Higher-than-usual refund payments have further reduced net revenue, as the government moved to clear outstanding claims from exporters and manufacturers.

Last month, FBR fell short of its monthly collection target by PKR 74 billion in October.

The FBR provisionally collected PKR 952 billion in October, short of its monthly target of PKR 1,026 billion.

The International Monetary Fund has allowed Pakistan to revise its annual tax revenue target downward by PKR 166 billion, setting a new target of PKR 13.965 trillion for FY2025-26, compared to the earlier projection of PKR 14.13 trillion.

According to official sources, the downward revision stems from two primary factors: an estimated PKR 80 billion in revenue loss from recent floods that disrupted economic activity in several regions, and an additional PKR 86 billion shortfall due to lower-than-expected inflation during the first quarter of the fiscal year.