Islamabad, March 2, 2026 – The Federal Board of Revenue (FBR) is considering a contingency plan to achieve its revenue collection target for the fiscal year 2025-26, after missing its assigned target for the first eight months of the year, sources confirmed.
According to FBR insiders, the agency collected Rs8.12 trillion during the first eight months (8MFY26), falling short of the assigned target of Rs8.55 trillion by Rs430 billion. The shortfall underscores mounting challenges in meeting annual revenue targets amid economic pressures, policy constraints, and compliance gaps.
Potential Impact on Fiscal Policy
If the revenue gap persists, the Ministry of Finance may be forced to:
• Seek a further downward revision of FBR’s annual tax collection target
• Implement expenditure cuts to remain within agreed fiscal deficit and primary balance parameters under the IMF Extended Fund Facility (EFF) program
Notably, the IMF had already revised Pakistan’s FY26 annual tax collection target from Rs14.13 trillion to Rs13.979 trillion, reflecting cautious revenue projections.
Contingency Measures Under Consideration
FBR sources indicated that if the IMF does not approve a downward adjustment, the agency will have to activate contingency measures to safeguard fiscal targets. Proposed measures include:
• Increasing excises on fertilizers and pesticides by 5 percentage points
• Introducing excise duties on high-value sugary items
• Broadening the sales tax base by moving select items to the standard rate
• Reducing or postponing government spending in response to lower-than-expected revenues
These steps were agreed upon in prior discussions with the IMF as part of Pakistan’s Extended Fund Facility (EFF) review, to ensure fiscal stability in the event of revenue shortfalls.
Outlook
Analysts say the FBR’s ability to meet its FY26 revenue target will depend on effective enforcement of contingency measures, economic growth trends, and taxpayer compliance. Failure to bridge the gap could compel additional fiscal adjustments, potentially impacting government development spending and macroeconomic stability.