The Federal Board of Revenue (FBR) has reported a significant shortfall in tax collection during the first seven months of the ongoing fiscal year, intensifying concerns over Pakistan’s revenue performance amid rising fiscal pressures.
According to official data, the FBR missed its assigned tax collection target by Rs372 billion during the period from July 2025 to January 2026. Against a cumulative target of Rs7,521 billion, the tax authority managed to collect Rs7,147 billion, highlighting persistent gaps across major revenue heads.
In January 2026, tax receipts stood at Rs986 billion as of January 30, falling short of the monthly target of Rs1,031 billion. While income tax collection showed relatively strong performance—reaching Rs465 billion against a target of Rs452 billion—other key components underperformed.
Sales tax revenue amounted to Rs352 billion, missing the target of Rs387 billion, while customs duties generated Rs107 billion compared to the projected Rs126 billion. Federal excise duty (FED) collections also remained below expectations, with receipts of Rs61 billion against a target of Rs65 billion for the month.
The revenue shortfall was further aggravated by higher tax refunds. The FBR issued Rs47 billion in refunds during January alone, while cumulative refunds for the July–January period increased to Rs340 billion, up from Rs314 billion in the same period last fiscal year.
Despite the underperformance, tax officials remain cautiously optimistic about narrowing the gap in the coming months. The FBR expects to generate around Rs200 billion in super tax revenues between January and March 2026, which could partially offset the deficit.
Under Pakistan’s agreement with the International Monetary Fund (IMF), the FBR faces an ambitious full-year tax collection target of Rs9,917 billion, making improved revenue mobilisation critical in the remaining months of the fiscal year.
