FBR to fall short of IMF tax target by Rs975 billion

The federal government and the Federal Board of Revenue (FBR) failed to achieve the tax collection target set by the International Monetary Fund (IMF) in the fiscal year 2025-26.

The FBR collected about Rs13.003 trillion in taxes by the end of the fiscal year, which is Rs975 billion less than the IMF’s revised target of Rs13.979 trillion.

According to tax officials, Rs12.97 trillion had been received through the banking system, while the remaining clearance of about Rs33 billion was expected by night.

For the second consecutive year, the FBR fell short of its annual target by about Rs1 trillion or more. In dollar terms, the FBR was able to collect taxes equivalent to about $46 billion, while the government and the IMF had set a target of $50 billion in June last year.

Thus, a shortfall of about $4 billion was revealed. According to the data, FBR’s tax collections during the fiscal year increased by 10.7 percent compared to the previous year, but this rate was lower than the 14 percent nominal growth of the country’s economy.

Tax refunds worth Rs588 billion were also issued during the same period, which was Rs115 billion more than the previous year. The FBR failed to achieve all its major tax targets, collecting Rs6.6 trillion in income tax, which was Rs323 billion less than the target.

Sales tax collections stood at Rs4.265 trillion, which was Rs494 billion less than the target. Federal excise duty collected Rs840 billion, which was Rs51 billion less than the target, while customs duty collections stood at Rs1.33 trillion, which was Rs108 billion less than the target.

The government has given a new tax target of Rs 15.264 trillion to the FBR for the new fiscal year 2026-27, which will require an additional growth of about 17.4 percent. Tax and enforcement measures worth more than Rs 1 trillion have also been introduced in the budget to achieve this target.

According to the government, the completion of important national projects including defense spending, construction of large water reservoirs, food and fuel security will be possible only when the FBR achieves the set tax target for the new fiscal year.