The Federal Board of Revenue (FBR) missed its revised tax collection target for fiscal year 2025-26, ending the year with a revenue shortfall of approximately Rs. 978 billion against the benchmark agreed with the International Monetary Fund (IMF).
According to official figures, the FBR collected Rs. 13.001 trillion in taxes during FY2025-26, compared with the revised annual target of Rs. 13.979 trillion that was retained by the IMF during its May review of Pakistan’s economic program.
The original tax collection target for the fiscal year had been set at Rs. 14.13 trillion when the federal budget was announced last year. However, the government and the IMF later revised the target downward in response to weaker-than-expected revenue growth and challenging economic conditions.
Despite the lower benchmark, the FBR was unable to achieve the revised target.
Tax officials attributed the shortfall to slower economic activity, reduced import volumes, and other macroeconomic factors that limited revenue generation throughout the year. They added that the tax authority continued enforcement drives and administrative reforms aimed at improving compliance and expanding the country’s tax base.
During the fiscal year, the FBR also processed tax refunds worth billions of rupees, particularly for exporters, to support businesses and facilitate economic activity.
A breakdown of collections showed that income tax remained the largest source of revenue, followed by sales tax, customs duties, and Federal Excise Duty (FED).
Looking ahead, the government is expected to set a higher tax collection target for FY2026-27, with the FBR likely to intensify enforcement measures, strengthen tax administration, and broaden documentation efforts to improve revenue collection and narrow the fiscal gap.
