The Federal Board of Revenue (FBR) failed to meet its tax collection targets for the first half of the current fiscal year 2025-26.  This marks the fifth consecutive month that the FBR has failed to meet its tax revenue goals.  Sources said tax revenue in the first six months of the financial year fell short by over Rs335 billion.  FBR had set target of Rs6,489 billion for July and December 2025 period, but it managed to collect Rs6,154 billion. 

The target was only met in July 2025, with December's collection falling approximately Rs25 billion short of the target.  In December, the FBR collected Rs1,421 billion, against a target of Rs1,446 billion.  The highest collection in December came from income tax, which amounted to Rs828 billion, followed by sales tax at Rs434 billion, customs duties at Rs123 billion, and federal excise duties at over Rs72 billion. 

FBR officials reported that Rs38 billion were paid in tax refunds during December. The annual tax target has been revised down to Rs13,979 billion from the original target of Rs14,130 billion, with significant corporate sector payments of Rs305 billion made on the last day of December. 

The revision of the target was carried out in consultation with the International Monetary Fund (IMF), which will review FBR's tax performance next week.  Due to the shortfall, there is a possibility of new tax measures being introduced in the next quarter. There are also proposals to reduce government spending as an alternative to make up for the shortfall, as a decrease in tax revenue could affect the budget deficit and other economic targets. 

Credit: Independent News Pakistan (INP)