Islamabad, February 1, 2025 – The Federal Board of Revenue (FBR) has missed its tax collection target for January 2025, falling short by Rs 85 billion. The total tax revenue collected by the FBR for the month amounted to Rs 872 billion, which was significantly below the target of Rs 957 billion.
While the FBR fell short of its target, the revenue collection for January still represents a notable achievement, with a 29 percent increase compared to the same month in the previous year. In January 2024, the FBR had collected Rs 677 billion. This increase reflects the revenue department’s ongoing efforts to improve tax collection despite facing economic challenges, including a reduction in interest rates and a decline in inflation.
Despite not meeting the target, the FBR’s January performance highlights positive growth across various tax categories. Income tax revenue saw a rise of 28 percent, sales tax revenue grew by 29 percent, and Federal Excise Duty (FED) collection surged by 34 percent. Furthermore, Customs Duties experienced a remarkable increase of 30 percent, marking the first significant rise in this area for the year. This uptick in Customs Duties signals a revival of economic activity and a potential rebound in the country’s economic performance.
The growth across multiple tax categories suggests that the FBR’s efforts to improve tax administration and collection are yielding results. In addition to this, the tax revenue growth comes despite a challenging economic environment, with the reduction in interest rates and a decrease in inflation contributing to slower economic activity.
In December 2024, the FBR had also missed its target, collecting Rs 1,326 billion against a target of Rs 1,373 billion. While the FBR’s performance in both December and January did not meet the set targets, the overall revenue collection figures indicate a resilient economic recovery, as evidenced by the strong growth in tax revenues.
The International Monetary Fund (IMF), which assesses Pakistan’s tax collection on a quarterly basis, has set the target for the January to March 2025 period at Rs 3,150 billion. The IMF anticipates that tax collections will improve as economic activity picks up in March, contributing to more robust revenue growth.