Revenue gap widens as FBR faces Rs336bn shortfall in first six months

• Earlier assessments warned gap could widen up to Rs500 billion.
• FBR revised its annual tax collection target to Rs13,979bn.
• FBR collected Rs1,421bn against fixed target of Rs1,446bn in Dec.
  

The Federal Board of Revenue (FBR) missed its International Monetary Fund (IMF)-linked revenue goal for the first half of the current fiscal year, falling short by Rs336 billion, The News reported on Thursday.

Against the agreed target of Rs6,490 billion for July to December, the tax authority managed to collect Rs6,154 billion. Earlier assessments had warned that the gap could potentially increase to as much as Rs400-500 billion.

The FBR had already revised its annual tax collection target downward from the Rs14,130 billion approved by parliament to Rs13,979 billion, in line with its IMF agreement. However, parliament has not yet granted its assent to this revision.

In December 2025, the FBR collected Rs1,421 billion against a fixed target of Rs1,446 billion, a shortfall of Rs25 billion.

FBR Chairman Rashid Mahmood Langrial told The News on Wednesday night that the final figures might increase by a few billion, raising the net tax collection further.

Notably, a major portion of income tax was collected on December 31, 2025. It remains to be determined how much of this came from advance payments by the corporate sector in order to approach the desired target.

An IMF team is set to virtually review FBR’s tax collection performance next week. The IMF has indicated that if revenue shortfalls increase, the government and FBR will have to implement contingency tax measures. Based on current performance, and if the IMF is satisfied, the government may negotiate for proportional expenditure reductions to maintain the primary balance and fiscal deficit targets for the year.

FBR officials deny any unusual use of advance payments, citing that while the corporate sector deposited around Rs305 billion on the last day of December 2025, it had deposited Rs278 billion in the final days of the last fiscal year as well.

In December 2025, the FBR collected Rs1,421.1 billion after issuing refunds of Rs38 billion. This included Rs828 billion in income tax, Rs434.3 billion in sales tax, Rs72.6 billion in federal excise duty and Rs123.5 billion in Customs duty.