ISLAMABAD: The Federal Board of Revenue (FBR) has fallen short of its collection target by Rs274 billion during the first four months (July–October) of FY2025–26, despite a record surge in income tax return filings.
According to provisional data, the FBR collected Rs950 billion in October against a monthly target of Rs1,026 billion, missing it by Rs76 billion. This pushed the cumulative shortfall for July–October to Rs274 billion, with total collections standing at Rs3.84 trillion against the four-month target of Rs4.11 trillion. FBR Chairman Rashid Mahmood Langrial told The News that the October figure could rise slightly to Rs952 billion after final adjustments.
The government had initially set an ambitious annual tax target of Rs14.13 trillion for FY26, later revised downward following the second review of the $7 billion IMF Extended Fund Facility (EFF). Under the IMF agreement, Islamabad has pledged to impose additional revenue measures from January 1, 2026, if the shortfall persists. These include raising GST on solar panels from 10% to 18%, higher taxes on the telecom sector, and increased FED on fertilizers and pesticides. The IMF’s proposal to hike the general GST rate from 18% to 19% was rejected, along with the government’s own suggestion to introduce a flood levy.
In October, FBR’s breakdown of collections showed Rs430 billion from income tax, Rs345 billion from sales tax, Rs70 billion from FED, and Rs109 billion from customs duty. Refunds jumped to Rs48 billion in October — up sharply from Rs19 billion a year earlier.
Performance across tax regions remained mixed: Large Taxpayer Units (LTUs) in Islamabad, Lahore, and Karachi underperformed, while some Regional Tax Offices (RTOs), including Lahore, Karachi RTO-1, and Gujranwala, posted gains. Sialkot and Faisalabad RTOs, however, fell below their targets.
Meanwhile, return filing reached an all-time high, with 5.9 million taxpayers submitting returns by October 31 — up 17.6% from 5 million last year. Of these, 3.6 million filed with tax payments, reflecting an 18.6% increase in paying filers. Individual taxpayers contributed nearly Rs69 billion in taxes, up 15% year-on-year.
The FBR attributed this compliance boost to a nationwide outreach campaign led by the Prime Minister’s Office, the Ministry of Information, and the FBR itself — leveraging robocalls, WhatsApp messages, and behavioural nudges. Around 800,000 personalized messages and 70,000 targeted emails were sent to encourage timely filing.
Appreciating taxpayers’ growing cooperation, the FBR reaffirmed its commitment to a transparent, digitalized tax system. While the Prime Minister has directed against a blanket extension in filing deadlines, taxpayers facing genuine hardship may seek an individual extension through the IRIS portal.
