ISLAMABAD: The Federal Board of Revenue (FBR) has presented a detailed revenue collection strategy to the International Monetary Fund, expressing confidence that Pakistan will achieve its revised tax target for the fiscal year 2025–26 despite a substantial shortfall recorded so far.
According to sources in the finance ministry, the FBR briefed the IMF on a series of enforcement and compliance initiatives designed to improve tax recovery and strengthen revenue generation during the remaining months of the fiscal year.
The development comes as the tax authority faces a revenue gap of approximately Rs429 billion during the first eight months (July–February) of FY26. Initially, the FBR had been assigned an annual tax collection target of Rs14.13 trillion. However, in view of prevailing economic conditions, the IMF allowed the government to revise the target downward to Rs13.93 trillion.
Despite the revised target, the pace of revenue collection remains challenging. The FBR has collected about Rs8.12 trillion during the first eight months of FY26 and now needs to generate nearly Rs5.38 trillion in the remaining four months to meet the annual goal.
Sources revealed that the IMF has refused to further reduce the revenue target, while the government is also hesitant to introduce new taxation measures due to concerns over their potential impact on businesses and consumers.
In response, the FBR has shifted its focus toward strengthening enforcement, audits, and recovery of outstanding tax liabilities rather than imposing additional taxes.
Officials shared several revenue-generating measures with the IMF that are expected to help bridge the shortfall before the end of the fiscal year. These include the recovery of approximately Rs120 billion under the super tax by June 30, 2026, around Rs80 billion expected from favorable court decisions in pending tax litigation, and nearly Rs50 billion through settlements handled by Alternate Dispute Resolution Committees (ADRC).
The strategy also includes expanding documentation of the retail sector through greater integration of Point of Sale (POS) systems, intensifying audit and enforcement actions against tax defaulters, and utilizing Compliance Risk Management (CRM) systems to identify cases of underreported income.
Tax officials indicated that the FBR is likely to accelerate audits and enforcement drives across various sectors to recover unpaid or underpaid taxes.
However, economic experts caution that generating the remaining Rs5.38 trillion within four months will be a significant challenge and may result in increased scrutiny of taxpayers and businesses.
Despite these hurdles, the FBR has assured the IMF that it remains committed to achieving the revised revenue target through stronger compliance measures, improved economic documentation, and enhanced recovery of outstanding tax dues.
