FBR misses November revenue target with Rs143bn tax shortfall

• FBR high-ups hopeful of crossing Rs900bn mark for Nov.
• Tax authority's Nov net collection hovers at Rs0.892tr.
• Achieving annual target of Rs14,130bn seems impossible.

ISLAMABAD: The Federal Bureau of Revenue (FBR) is facing  a shortfall of Rs143 billion in achieving its desired target for November with sluggish economic activities, closure of industrial units and hike in tax rates doubling the revenue shortfall, The News reported on Sunday.

The FBR high-ups are hopeful that the revenue collection might cross the Rs900 billion mark for November 2025.

In the first four months (July-October) period, the FBR had faced a shortfall on an average in the range of Rs68 billion on a per-month basis; however, in the fifth month (November 2025) this gap widened to Rs143 billion, according to provisional revenue figures available till 4:25 pm on Saturday, indicating that the shortfall started piling up after each passing month.

The possibility of achieving the FBR’s annual target of Rs14,130 billion seems impossible. Even the downward-revised tax collection target from Rs14,130 billion to Rs13,979 billion, agreed with the IMF, might face a major shortfall, keeping in view the existing pace of collection in the first five months of the current fiscal year.

In recent days, the government's top functionaries, including SIFC’s National Coordinator Lt Gen Sarfraz Ahmed and Governor State Bank of Pakistan Jameel Ahmed, have publicly conceded that the flawed growth model, comprising higher taxation rates for the formal sector, was unsustainable and needed to be changed.

Everyone concedes that it is necessary to slash tax rates, but they are unable to ascertain how to do it in a sustained manner in the context of the IMF programme.

Pakistan and the IMF have envisaged a tax collection target of Rs6.49 trillion by the end of December 2025. The FBR’s tax collection hovered around Rs4.7 trillion in the first five months of the current fiscal year. In order to materialise the July-December target, the FBR will have to fetch Rs1.756 trillion in December 2025 to achieve the desired results.

According to the provisional tax collection figures, the FBR's net tax collection stands at Rs4.727 trillion after paying refunds of Rs0.254 trillion. The gross collection stood at Rs5.04 trillion. The FBR has collected income tax of Rs2.231 trillion, sales tax Rs1.875 trillion, federal excise duty of Rs0.326 trillion, and customs duty of Rs0.547 trillion in the first five months of the current fiscal year.

In November 2025, the FBR's gross collection stands at Rs0.995 trillion, out of which refunds were paid amounting to Rs0.48 trillion, so the net collection hovers at Rs0.892 trillion. The FBR's tax collection target stands at Rs1.035 trillion, so the shortfall touched the level of Rs0.143 trillion.

During July-October FY2026, the FBR’s tax collection stood at Rs3.834 trillion, up by 11.4% compared to the same period of the previous fiscal year.

With this widening shortfall in the first five months, the FBR will have to muster its efforts to materialise an ambitious tax collection figure of Rs1.75 trillion in December 2025.

In case of an exceeding revenue shortfall by the end of December, the IMF would come up with the prescription of imposing contingency revenue measures for the remaining period of the second half (January-June), as agreed on the occasion of the second review under the IMF programme.

The contingency taxation measures agreed with the IMF included jacking up GST on solar panels from 10 to 18%, increasing the tax rate on the telecom sector, and increasing FED on fertiliser and pesticides.

The government had accepted such contingency measures mainly because the IMF had asked to raise the GST standard rate from 18 to 19%, but the government had rejected it in totality. The flood levy was knocked down by the IMF during the second review parleys held between the two sides.