Revenue gap widens as FBR faces Rs 336 billion shortfall in first six months

• Earlier estimates warned that the gap could widen by as much as Rs 500 billion.
• FBR revised annual tax collection target to Rs 13,979 billion.
• FBR collected Rs 1,421 billion against a set target of Rs 1,446 billion in December.
  

The Federal Board of Revenue (FBR) has missed its International Monetary Fund (IMF)-linked revenue target for the first half of the current financial year, falling short by Rs336 billion. The News reported on Thursday.

Against the agreed target of 6,490 billion rupees for July to December, the tax authority managed to collect 6,154 billion rupees. Earlier estimates had warned that the gap could potentially rise to as much as Rs 400-500 billion.

The FBR had already revised its annual tax collection target down from the Rs 14.130 billion approved by the parliament to Rs 13.979 billion, in line with its agreement with the IMF. However, parliament has yet to approve this revision.

In December 2025, the FBR collected Rs 1,421 billion against a fixed target of Rs 1,446 billion, a shortfall of Rs 25 billion.

FBR chairman Rashid Mahmood Langrial said The News on Wednesday night that the final figures could rise by a few billion, further increasing net tax collection.

Notably, much of the income tax was collected by 31 December 2025. It remains to be determined how much of this came from advances by the corporate sector in order to reach the desired target.

An IMF team is set to substantially review the tax collection performance of the FBR next week. The IMF has pointed out that if revenue shortfalls widen, the government and the FBR will have to implement emergency fiscal measures. Based on current performance and if the IMF is satisfied, the government can negotiate proportional reductions in spending to maintain the primary balance and fiscal deficit targets for the year.

FBR officials deny any unusual use of advances, saying that while the corporate sector deposited around Rs 305 billion on the last day of December 2025, it had deposited Rs 278 billion in the last days of the last financial year as well.

In December 2025, FBR collected Rs 1,421.1 billion after issuing refunds of Rs 38 billion. This included Rs828 billion in income tax, Rs434.3 billion in sales tax, Rs72.6 billion in federal excise duties and Rs123.5 billion in customs duties.