FBR fails to achieve tax collection target for February

• FBR misses target for second consecutive month.
• Says tax collection target for first 8 months of FY24 achieved.
• FBR now has to collect Rs3,586 billion in taxes in March-June.

ISLAMABAD: The caretaker government’s claims of improving the fiscal side were exposed as the Federal Board of Revenue (FBR) faced a revenue shortfall of Rs33 billion in February 2024.

According to a The News report, the tax authorities were only able to collect Rs681 billion against the set target of Rs714 billion.

However, the FBR has claimed that it has achieved the tax collection target for the first eight months (July-Feb) period of the current fiscal year.

In a post on X, FBR announced that it surpassed the eight-month target of Rs5,829 billion and registered a growth of 30%.

During February 2024, the FBR collected Rs681 billion against Rs519 billion collected during February 2023, registering a growth of 32%.

This is the second consecutive month that the FBR has failed to achieve its monthly revenue collection target.

The shortfall increased in February 2024 when Finance Minister Dr Shamshad Akhtar put all-out efforts to restructure the board.

However, the restructuring plan was blocked by the Election Commission of Pakistan.

Now the Islamabad High Court has given its observation while adjourning the case for the next hearing, stating whether this restructuring is required or not shall be decided by the new government. This will be a policy decision of the next government, so let the next cabinet decide it, the court observed.

Considering the shortfall, FBR now faces the gigantic task of collecting Rs3,586 billion in taxes in the last four months (March-June) of the ongoing fiscal year.

The failure to achieve the target is a bad omen for the incoming government as it will have to start talks with the International Monetary Fund (IMF) for the completion of the second review and release of the third tranche under the $3 billion Standby Arrangement (SBA) programme.

In case of any further shortfall, the global lender may prescribe a prescription of additional revenue measures within the ongoing fiscal year.

The government has so far identified eight contingency revenue measures to generate additional revenue of Rs18 billion per month during 2023-24 in case the monthly FBR revenue falls short of the projected targets during 2023-24.

In January 2024, the FBR had suffered a shortfall of Rs9 billion. This is the second consecutive month the FBR is facing a shortfall in tax collection during the current fiscal year.