FBR Misses Target by Rs429bn in 8MFY26

Pakistan’s apex revenue authority, the Federal Board of Revenue (FBR), recorded a cumulative revenue shortfall of Rs429 billion during the first eight months of FY2025–26, notwithstanding sustained double-digit growth in overall collections, according to provisional data released on Saturday.

For the July–February period, total tax receipts amounted to Rs8.121 trillion against a budgeted target of Rs8.550 trillion. Although this represents an 11 per cent year-on-year increase compared to Rs7.334 trillion collected during the corresponding period of the previous fiscal year, the authority remained materially below its programmed trajectory.

In February 2026 alone, revenue collection stood at Rs944 billion — a 12 per cent increase over Rs844 billion collected in February 2025. However, the figure fell short of the monthly benchmark of Rs1.029 trillion by Rs85 billion, underscoring persistent target slippages.

A breakdown by tax head indicates that income tax collection reached Rs3.956 trillion during 8MFY26, compared to a target of Rs4.098 trillion, reflecting a Rs142 billion variance. Despite the shortfall, the figure marked a 12 per cent increase over Rs3.525 trillion collected in the same period last year.

Sales tax performance remained the principal contributor to the aggregate gap. Collections totalled Rs2.783 trillion against a projected Rs3.028 trillion, resulting in a Rs245 billion deficit. On a comparative basis, sales tax receipts rose 10 per cent from Rs2.530 trillion in the prior year. Customs duty collections stood at Rs850 billion, missing the Rs898 billion target by Rs48 billion, though registering 5 per cent growth over Rs813 billion recorded in the corresponding period last year.

In contrast, Federal Excise Duty (FED) outperformed expectations. Collections reached Rs532 billion, exceeding the Rs526 billion target and reflecting a 14 per cent increase over Rs467 billion in the same period of the preceding fiscal year.

The revenue underperformance has primarily been attributed to subdued domestic sales tax mobilisation, the suspension of super tax measures, and related policy adjustments. Notably, the International Monetary Fund (IMF), in its latest programme review, has already revised downward the FBR’s annual tax target by Rs150 billion.

During the July–February period, refunds and rebates amounted to Rs386 billion, compared with Rs352 billion in the corresponding period last year — an increase of approximately 9.65 per cent — thereby exerting additional net revenue pressure.

In FY2024–25, the FBR collected Rs11.737 trillion against a revised target of Rs11.900 trillion, missing the goal by nearly Rs163 billion despite two downward revisions. Nevertheless, annual collections reflected a 26.19 per cent increase over Rs9.301 trillion realised in FY2023–24.

Separately, FBR Chairman Rashid Mahmood Langrial, in a meeting with an 18-member delegation of the Islamabad Chamber of Commerce and Industry led by President Sardar Tahir Mahmood, reiterated that all legally due taxes would be enforced without exception. While acknowledging that genuine hardship cases would receive appropriate consideration, he emphasised a zero-tolerance stance on tax evasion.

The delegation raised key policy concerns, including the super tax regime, delays in refund processing, point-of-sale integration requirements for small enterprises, and taxation of the real estate and property sectors. The Chairman directed relevant FBR divisions to review the matters and resolve legitimate grievances on a priority basis.