Islamabad – The Federal Board of Revenue (FBR) has collected a total of Rs 7.34 trillion during the first eight months (July – February) of the ongoing fiscal year. However, despite this substantial collection, the FBR has failed to meet its revenue target for the period.
According to media reports, the revenue collection target for the FBR was set at Rs 7.95 trillion. This means the FBR is facing a significant shortfall of Rs 604 billion, raising concerns over future fiscal targets and Pakistan’s economic standing in negotiations with the International Monetary Fund (IMF).
With a revenue target of Rs 9.168 trillion agreed upon with the IMF for March 31, 2025, the FBR will need to generate Rs 1.825 trillion in March. This poses a major challenge, given the impact of Ramadan, holidays, and fewer working days leading up to Eid-ul-Fitr.
Detailed figures indicate that the FBR collected Rs 7.343 trillion in the first eight months of the fiscal year against the set target of Rs 7.947 trillion, resulting in a shortfall of Rs 604 billion. The Pakistani negotiators now have limited options: either request the IMF to revise the FBR’s tax collection target downward or utilize fiscal space due to reduced debt servicing to maintain the fiscal deficit within acceptable limits.
The upcoming IMF negotiations have gained increased importance, given the massive shortfall in revenue collection. If the current trend continues, the revenue target shortfall may exceed Rs 1 trillion by the end of June 2025. The IMF’s review mission is scheduled to arrive in Islamabad this weekend, with discussions commencing on Monday, March 3, 2025, to assess Pakistan’s progress under the $7 billion Extended Fund Facility (EFF). Additionally, Pakistan has requested an extra $1 billion under the Resilience and Sustainability Facility (RSF), potentially increasing the total loan to $8 billion.
The FBR’s revenue collection suffered another blow in February 2025, with a shortfall of Rs 136 billion. The tax authority collected Rs 847 billion against a target of Rs 983 billion, widening the overall shortfall. The gross collection for February was Rs 885 billion, but after issuing refunds worth Rs 37 billion, the net revenue stood at Rs 847 billion.
Breaking down the FBR’s revenue sources for February 2025: Income Tax accounted for Rs 347 billion, Sales Tax Rs 367 billion, Customs Rs 106 billion, and Federal Excise Duty (FED) Rs 65 billion. The worsening shortfall is evident, as February’s collection was even lower than January’s Rs 872 billion. The cumulative shortfall for the first seven months was Rs 468 billion, and with February’s deficit of Rs 136 billion, the total shortfall for the first eight months of FY25 has reached Rs 604 billion.