The FBR has failed to meet its revenue collection target for the fiscal year, falling short by approximately Rs864 billion despite implementing several tax measures aimed at boosting government income.
According to available figures, the FBR collected Rs11.232 trillion during the fiscal year against a revised target of Rs12.01 trillion. The shortfall comes despite higher withholding taxes, increased duties, and other taxation measures introduced across various sectors.
To achieve its annual goal, the tax authority now requires around Rs2.75 trillion in June alone. This would mean collecting nearly Rs91.6 billion every day, a challenging task given current economic conditions.
Tax collection growth remained close to 10 percent during the year. However, this increase stayed below the economy’s nominal growth rate, raising concerns about the effectiveness of revenue-generation efforts.
Income tax remained the largest contributor, with collections reaching Rs5.54 trillion. However, the category still remained below target by Rs261 billion. Sales tax collections stood at Rs3.78 trillion, missing the target by Rs457 billion.
Meanwhile, federal excise duty generated Rs745 billion, showing a 15 percent increase compared to the previous year, although collections remained slightly below expectations. Customs duty collections reached Rs1.18 trillion but still fell short of the target by Rs116 billion despite higher import volumes.
Refund payments also continued to rise, crossing Rs551 billion during the fiscal year.
To bridge the revenue gap, policymakers are reportedly considering several new taxation measures. These may include higher withholding taxes on imports, revised income tax rates for wholesalers, and increased turnover taxes on businesses.
Authorities are also examining the possibility of imposing sales tax on certain fast-moving consumer goods based on market prices. A potential windfall tax on oil companies is also under discussion.
The FBR is additionally reviewing tax concessions currently available on plug-in hybrid vehicles. Reduced tax rates on such vehicles are expected to expire by June 2026, with the government considering applying the standard 18 percent sales tax afterward.
As fiscal pressures continue to mount, the FBR faces growing challenges in meeting revenue targets while balancing economic growth and compliance with international financial commitments
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