Islamabad, May 1, 2025 – Pakistan’s tax collection performance continues to struggle as the Federal Board of Revenue (FBR) faces a widening shortfall that has now exceeded Rs800 billion during the first 10 months (July to April) of the current fiscal year (FY2024-25).
According to provisional figures released by the FBR, total tax collection stood at Rs9.31 trillion against a target of Rs10.13 trillion, leading to a significant shortfall of Rs821 billion. This gap marks a sharp increase from the Rs703 billion shortfall reported during the first nine months (July-March), indicating a worsening trend in revenue collection.
In April 2025 alone, the FBR managed to provisionally collect Rs845 billion, falling short of the monthly target of Rs963 billion. This monthly shortfall of Rs118 billion highlights the ongoing challenges faced by the tax authority, despite recent efforts to improve collection.
Notably, the federal government had already revised the FBR’s annual tax collection target downward — from the originally set Rs12.913 trillion to Rs12.334 trillion — in hopes of making the target more achievable. However, the consistent monthly shortfalls suggest that even the revised target may be difficult to meet without urgent corrective measures.
Despite the implementation of new tax policies and additional revenue measures in the last federal budget, the FBR has been unable to fully capitalize on those strategies. In response to the growing shortfall, the FBR recently suspended the weekly Saturday holiday for all Inland Revenue offices. This move aims to increase working hours and improve revenue collection in the remaining two months of the fiscal year.
Experts believe that the persistent shortfall reflects broader economic challenges, including lower-than-expected growth in imports, stagnant domestic demand, and compliance issues within key sectors. The FBR now faces pressure to enhance enforcement and widen the tax base if it hopes to reduce the deficit before the fiscal year ends in June.
As Pakistan continues its talks with the International Monetary Fund (IMF), achieving stable and sustainable revenue collection will remain a top priority for the government. A persistent shortfall not only threatens fiscal planning but also affects the country’s ability to meet development and public service goals.