Islamabad, November 1, 2024 – The Federal Board of Revenue (FBR) is grappling with a significant tax revenue deficit, revealing a shortfall that exceeded Rs 100 billion for October 2024 alone.
According to provisional and unofficial data, the FBR amassed Rs 877 billion during October against a targeted Rs 980 billion, marking a staggering shortfall of Rs 103 billion.
The figures for the broader fiscal year similarly reflect a downward trend in tax collections. Between July and October 2024, the FBR collected a cumulative Rs 3.44 trillion, falling short of the projected target of Rs 3.636 trillion by Rs 196 billion. The mounting fiscal pressure signals the challenges facing Pakistan’s tax authorities in meeting ambitious revenue targets amid an economy fraught with inflation and constrained growth.
Moreover, projections indicate that this shortfall may extend further into the fiscal year. For the second quarter (October-December) of the 2024-25 fiscal year, the FBR anticipates a cumulative deficit of approximately Rs 230 billion. This projection is a stark reminder of the current fiscal hurdles that may hinder the government’s ability to meet its budgetary commitments without pursuing alternative revenue-raising measures or enacting stringent austerity.
An ongoing struggle to meet revenue targets could also amplify fiscal deficits, compelling policymakers to consider either external financing or adjustments to subsidy structures and tax policies. The situation underscores the FBR’s daunting task of not only expanding the tax net but also enhancing compliance amid an economic backdrop that offers little respite to taxpayers.
In a parallel move to bolster industry and stimulate the export sector, the FBR, under the directive of its Chairman, announced that all pending Sales Tax Refund Payment Orders for exporters would be disbursed immediately. Totalling Rs 32 billion, these refunds had been processed under the FASTER system up until September 30, 2024, and will be disbursed starting November 1. The move aims to inject liquidity into the export sector, providing much-needed relief to exporters who have faced prolonged payment delays. By addressing this backlog, the FBR hopes to foster a more resilient export sector, which remains a crucial pillar of the nation’s economy.