ISLAMABAD: The Federal Board of Revenue (FBR) missed its projected collection target by a staggering Rs429 billion during the first eight months of 2025-26.

However, the collection recorded an 11 per cent increase to Rs8.121 trillion during July-February FY26, compared with Rs7.334tr raised in the same period last year, according to provisional figures released on Saturday.

The FBR had set a revenue collection target of Rs8.550tr for 8MFY26. The revenue shortfall is primarily attributed to a slowdown in domestic sales tax collection, suspension of super tax and several other factors.

The February collection grew by 12pc to Rs944bn from Rs844bn in the corresponding month last year. However, the collection fell short of the monthly target of Rs1.029tr by Rs85 bn.

Records 11pc YoY rise to Rs8.121tr; income, sales tax collection falls

The IMF, in its last review, has already revised down the FBR’s annual tax collection target by Rs150bn.

In FY25, the FBR missed its collection target by nearly Rs163bn, even after two downward revisions and raised Rs11.737tr against the revised target of Rs11.900tr. However, the collection reflects a year-on-year growth of 26.19pc from Rs9.301tr in FY24.

The FBR issued Rs386bn in refunds and rebates to taxpayers during 8MFY26, up from Rs352bn a year earlier, an increase of 9.65pc.

Income tax collection reached Rs3.956tr during 8MFY26, recording a shortfall of Rs142bn against the Rs4.098tr target. However, a 12pc increase was recorded compared to Rs3.525tr in the corresponding period last year.

Similarly, the sales tax collection totalled Rs2.783tr, recording a shortfall of Rs245bn against the Rs3.028tr projection, though it marked a 10pc rise over last year’s Rs2.530tr. Customs duty collection stood at Rs850bn, against the Rs898bn target, resulting in a shortfall of Rs48bn. However, it grew by 5pc compared to Rs813bn last year.

In contrast, the Federal Excise Duty collection reached Rs532bn, surpassing the projected target of Rs526bn and growing by 14pc from last year’s Rs467bn.

According to the FBR, income tax collection will improve further once the super tax is collected. This improved revenue collection performance is not incidental but reflects the structural impact of the FBR’s reforms, especially its enhanced enforcement measures and its coordinated effort to realise revenue stuck in litigation.

The improvement in large-scale manufacturing (LSM) production, a very positive and encouraging development, will help raise maximum sales tax collection in the upcoming months.

By leveraging digital infrastructure and the collection through enforcement measures, the FBR is improving compliance, expanding and deepening the tax net, and fostering taxpayer trust. This performance in direct taxes signals emerging behavioural shifts toward greater voluntary compliance, with potential spill-over benefits in the coming months.

FBR vows to collect due taxes

Federal Board of Revenue Chairman Rashid Mahmood Langrial said on Saturday that genuine hardship cases would receive special consideration, but stressed that all legally due taxes would be collected under any circumstances.

The chairman further said that tax evasion would not be tolerated. He was speaking with an 18-member delegation from the Islamabad Chamber of Commerce and Industry (ICCI), led by its President, Sardar Tahir Mahmood, at the FBR headquarters.

The delegation discussed key taxation issues faced by the business community in the federal capital.

During the meeting, the ICCI delegation apprised the FBR chairman of various challenges confronting businesses in the capital, including issues related to super tax, tax refunds, point-of-sale (PoS) integration for small businesses, taxation of the real estate and property sector and other operational hardships.

Mr Langrial and assured the delegation that we will do everything we can to support the business community. He emphasised that genuine hardship cases would be given special consideration, while reiterating that the collection of taxes payable under the law would be ensured and tax evasion would not be tolerated under any circumstances.

The Inland Revenue’s members legal and operations responded to the queries raised by the ICCI representatives and provided clarifications on relevant matters.

The FBR chairman stated that establishing a business-friendly environment remains the priority. He directed the concerned wings to examine the issues highlighted by the business community and resolve their genuine concerns at the earliest.

Published in Dawn, March 1st, 2026