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The Federal Board of Revenue has fallen significantly short
of its tax collection targets in the ongoing fiscal year, raising concerns
about fiscal pressures and the government’s ability to meet its commitments.
From July 2025 to January 2026, the FBR collected Rs 372 billion less than the
assigned target, according to official documents.
The figures show that by January 30, 2026, the FBR managed
to collect Rs 986 billion for the month, against a target of Rs 1,031 billion.
While efforts are underway to bridge the gap, including an expected Rs 200
billion collection under super tax during the January to March period, the
shortfall continues to weigh heavily on overall revenue performance.
Cumulatively, tax collection from July to January stood at
Rs 7,147 billion, whereas the target for the same period was fixed at Rs 7,521
billion. A closer look at individual tax heads reveals a mixed picture. Income
tax collection during January reached Rs 465 billion, showing a modest increase
compared to Rs 452 billion in the corresponding period. However, sales tax performance
remained below expectations, with collections at Rs 352 billion against a
target of Rs 387 billion.
Similarly, revenue from customs duties did not meet
projections. Against a target of Rs 126 billion, collections so far have
amounted to Rs 107 billion. Federal excise duty also lagged behind, with Rs 61
billion collected against a target of Rs 65 billion during the same period.
These gaps across multiple revenue streams underline the broader challenges
faced by the tax authority amid slowing economic activity and compliance
issues.
On the refunds side, the FBR issued tax refunds worth Rs 47
billion in January alone, while total refunds from July to January reached Rs
340 billion. This compares with Rs 314 billion refunded during the same period
of the previous fiscal year, indicating a rise in refund outflows that further
impacts net revenue.
The pressure on the FBR is expected to intensify in the
coming months, particularly in light of commitments made under the agreement
with the International Monetary Fund to collect Rs 9,917 billion in tax revenue
by March 2026. To meet this target, the FBR will have to collect more than Rs
2,765 billion within a short span of just two months, an ambitious task given
the current pace of collections.
For comparison, tax revenues during the first seven months
of the last fiscal year 2024–25 stood at Rs 6,699 billion, highlighting that
although collections have increased year-on-year, they remain insufficient to
meet the higher targets set for the current fiscal cycle. The coming weeks will
be critical as the government looks to boost revenue, manage expenditures, and
stay aligned with its fiscal roadmap.
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