ISLAMABAD: The Federal Board of Revenue missed its revenue collection target by nearly Rs331 billion in the first half of 2025-26, driven by a fall in domestic sales tax and income tax collection.
The FBR collected Rs6.159 trillion during July-December period against the target of Rs6.490tr. However, the collection is 10pc higher compared to the year-ago figure of Rs5.618tr.
The revenue shortfall is primarily attributed to a slowdown in domestic sales tax collection, driven by several factors. The decline was also recorded in the income tax collection during 1HFY26.
As a result of these factors, the revenue collection fell short of target by Rs21bn in December FY26 to Rs1.425tr against the projected target of Rs1.446tr. However, it recorded a growth of 7.38pc when compared with the last year collection of Rs1.327tr in December FY25.
FBR raises Rs6.159tr against projection of Rs6.490tr
The IMF, in its last review, has already revised down the FBR’s annual tax collection target by Rs150bn. However, this shortfall could widen further if economic activity fails to rebound in the coming months.
In the FY25, the FBR missed its revenue collection target by nearly Rs163bn after two-times downward revision and collected 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.
In line with its commitments under the International Monetary Fund (IMF) programme, the government has introduced additional revenue measures totalling Rs1.05tr in the last budget. These include Rs655bn in new tax initiatives and Rs400bn through intensified enforcement. The revenue collection target for fiscal year 2025-26 is Rs14.131tr.
The FBR issued Rs293bn in refunds and rebates to taxpayers during July-December FY26, up from Rs277bn a year earlier, an increase of 5.77pc.
During July-December FY26, income tax collection reached Rs3.26tr, falling short of target by Rs161bn against the target of Rs3.187tr. This reflects a 9pc increase from Rs2.778tr collected last year.
Sales tax collection stood at Rs2.086tr, showing a shortfall of Rs172bn against the projection of Rs2.258tr. However, grew 10pc over last year’s Rs1.897tr. Customs duty collection stood at Rs642bn against the target of Rs654bn, though it grew by 8pc compared to Rs596bn last year.
The Federal Excise Duty collection reached Rs400bn against the projected target of Rs391bn and a growth of 16pc from last year’s Rs347bn.
Published in Dawn, January 1st, 2026