FBR misses IMF tax target by nearly Rs1 trillion for second consecutive year

Islamabad: The Federal Board of Revenue (FBR) has once again failed to meet its annual tax collection target for the fiscal year 2025–26, missing the International Monetary Fund (IMF) revised goal by nearly one trillion rupees.

According to official figures, the FBR collected approximately Rs13.003 trillion by the end of the fiscal year, against the IMF’s revised target of Rs13.979 trillion, leaving a shortfall of around Rs975 billion.

Tax authorities said nearly Rs12.97 trillion had been collected through the banking system, while an additional Rs33 billion was expected to be cleared overnight.

This marks the second consecutive year that the FBR has fallen short of its revenue target by nearly one trillion rupees or more. In dollar terms, the tax authority collected about $46 billion, compared to a government and IMF-set target of $50 billion, resulting in a gap of nearly $4 billion.

Despite a 10.7% year-on-year increase in tax collection, growth remained below the nominal economic growth rate of 14%, indicating persistent structural weaknesses in revenue performance.

During the fiscal year, the FBR also issued refunds worth Rs588 billion—Rs115 billion higher than the previous year.

Breakdown of Tax Performance

• Income Tax: Rs6.6 trillion collected, shortfall of Rs323 billion
• Sales Tax: Rs4.265 trillion, shortfall of Rs494 billion
• Federal Excise Duty (FED): Rs840 billion, shortfall of Rs51 billion
• Customs Duty: Rs1.33 trillion, shortfall of Rs108 billion

The government has set an ambitious new tax collection target of Rs15.264 trillion for fiscal year 2026–27, requiring a growth rate of around 17.4%. The budget also includes over Rs1 trillion in new tax measures and enforcement steps to help achieve the goal.

Officials say achieving the target is critical to financing national priorities including defence spending, water reservoir projects, food and energy security, and other key development initiatives.

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