The federal government demands an extra Rs2.29 trillion in tax revenue for the new fiscal year, despite a downward revision in the outgoing year’s collection target.
ISLAMABAD: The federal government has assigned an ambitious revenue collection target of Rs15.26 trillion to the Federal Board of Revenue (FBR) for the fiscal year 2026–27. This represents a steep 17 per cent increase from the outgoing fiscal year, according to official budget documents.
The massive tax demand comes on the heels of a challenging year for the country’s tax administration. For the outgoing fiscal year 2025–26, the FBR was originally assigned a target of Rs14.13 trillion, which was subsequently revised downward to Rs12.98 trillion due to collection shortfalls.
To meet the new projections, the government expects the FBR to collect an additional Rs2.29 trillion in FY2026–27 compared to the actual revised collection of the outgoing year—a feat that economic analysts view as a highly difficult task.
Direct Taxes Form Backbone of New Revenue Target
The official budget breakdown shows that the target for direct tax collection has been set at Rs7.81 trillion for the fiscal year 2026–27, marking a significant rise from the previous year’s target of Rs6.43 trillion.
Income tax remains the primary engine within this category, with its target scaled up to Rs7.48 trillion from Rs6.33 trillion. Other direct tax sub-categories have also been adjusted upwards:
• Capital Value Tax (CVT): Increased to Rs26.58 billion from Rs19.61 billion.
• Workers’ Welfare Fund (WWF): Raised steeply to Rs22.32 billion from Rs8.45 billion.
• Workers’ Profit Participation Fund (WPPF): Targeted at Rs83.50 billion, up from Rs72.21 billion.
Indirect Taxes Projected to Cross Rs7.6 Trillion
Parallel to direct taxation, the government has set an aggressive collection target for indirect taxes, fixing it at Rs7.65 trillion for FY2026–27, up from the previous target of Rs6.55 trillion.
Sales tax continues to burden the consumer sector heavily, with its target rising to Rs4.93 trillion from Rs4.33 trillion. Meanwhile, the target for customs duty has been pushed up to Rs1.65 trillion from Rs1.37 trillion, and the Federal Excise Duty (FED) is now expected to generate Rs1.07 trillion, up from Rs851 billion.
FBR Tax Target Breakdown: FY26 vs FY27
| Tax Classification | Outgoing FY 2025–26 Target | Upcoming FY 2026–27 Target | Required Growth |
| Direct Taxes | Rs 6.43 trillion | Rs 7.81 trillion | +21.4% |
| Indirect Taxes | Rs 6.55 trillion | Rs 7.65 trillion | +16.8% |
| Total FBR Target | Rs 12.98 trillion (Revised) | Rs 15.26 trillion | +17.5% |
Experts suggest that achieving these steep revenue benchmarks will require the FBR to rapidly accelerate its ongoing digitalisation and anti-evasion drives. Failing to expand the formal tax net could result in an increased financial burden on existing corporate and salaried taxpayers, threatening broader economic growth momentum.
