FBR misses November revenue target with fiscal deficit of Rs 143 billion

• FBR top brass are hoping to cross Rs 900 billion in November.
• The net collection of the tax authority in November is 0.892 trillion.
• Achieving the annual target of Rs 14,130 billion seems impossible.

Islamabad: The Federal Bureau of Revenue (FBR) is facing a shortfall of Rs 143 billion to meet the desired target for November with subdued economic activities, closure of industrial units and hike in tax rates doubling the revenue shortfall. The News reported on Sunday.

FBR top brass are hopeful that revenue collection can cross the Rs 900 billion mark by November 2025.

In the first four months (July-October), the FBR faced an average deficit of Rs 68 billion on a monthly basis. However, in the fifth month (November 2025) this gap widened to Rs 143 billion, according to provisional revenue data available till 4:25 pm. on Saturday, indicating that the deficit began to accumulate with each passing month.

The possibility of meeting the FBR’s annual target of Rs 14,130 billion seems impossible. Even the downwardly revised tax collection target of Rs 14.130 billion to Rs 13.979 billion, agreed with the IMF, may face a significant shortfall, considering the existing pace of collection in the first five months of the current fiscal year.

In recent days, top government officials, including SIFC National Coordinator Lt. Gen. Sarfraz Ahmed and State Bank of Pakistan Governor Jameel Ahmed, have publicly admitted that the flawed growth model, which includes higher tax rates for the formal sector, was unsustainable and needed to change.

They all agree that it is necessary to lower tax rates, but they are unable to ascertain how to do it in a sustainable way under the IMF program.

Pakistan and the IMF have projected a tax collection target of Rs 6.49 trillion by the end of December 2025. FBR’s tax collection hovered around Rs 4.7 trillion in the first five months of the current fiscal year. In order to realize the July-December target, the FBR will have to tap into Rs 1.756 trillion by December 2025 to achieve the desired results.

According to the provisional tax collection data, FBR’s net tax collection stands at Rs 4.727 trillion after paying refunds of Rs 0.254 trillion. The gross collection stood at Rs 5.04 trillion. The FBR has collected income tax of Rs 2.231 trillion, sales tax of Rs 1.875 trillion, federal excise duty of Rs 0.326 trillion and customs duty of Rs 0.547 trillion during the first five months of the current financial year.

In November 2025, FBR’s gross collection stands at Rs 0.995 trillion, out of which refunds of Rs 0.48 trillion have been paid, so the net collection stands at Rs 0.892 trillion. FBR’s tax collection target is Rs 1.035 trillion, so the deficit touched the level of Rs 0.143 trillion.

During July-October 2026, FBR’s tax collection stood at Rs 3.834 trillion, up 11.4% compared to the same period of the previous financial year.

With this widening deficit in the first five months, the FBR will have to redouble its efforts to realize an ambitious tax collection figure of Rs 1.75 trillion by December 2025.

If the revenue shortfall is exceeded by the end of December, the IMF would prescribe the imposition of revenue emergency measures for the remainder of the second semester (January-June), as agreed at the occasion of the second review under the IMF program.

The emergency tax measures agreed with the IMF included raising the GST on solar panels from 10 to 18%, increasing the tax rate on the telecom sector and increasing the FED on fertilizers and pesticides.

The government had accepted such emergency measures mainly because the IMF had called for an increase in the standard VAT rate from 18 to 19%, but the government had rejected it outright. The flood levy was shot down by the IMF during the second review conducted between the two sides.