FBR reports massive Rs468bn tax shortfall in first seven months of fiscal year

ISLAMABAD, FEB 1 (DNA): Amid ongoing efforts to increase revenue generation, the Federal Board of Revenue (FBR) is looking at a massive revenue shortfall of Rs468 billion in the first seven months (July-Jan) period of the current fiscal year.

The tax authority collected fetched Rs6,496 billion against the assigned target of Rs6,964 billion in the said time period.

The revenue shortfall continues to widen further with the passage of every month as the provisional collection figure for January 2025 shows that the FBR has made a collection of Rs872bn against the desired target of Rs956bn. With revenue collection of Rs872bn, the FBR has achieved growth of 29% in month on month basis.

In the first half (July-December period) the revenue shortfall stood at Rs384bn so it has widened further with a shortfall of Rs84bn in January 2025, and the overall shortfall in the first seven months escalated to Rs468bn.

This revenue collection shortfall becomes immensely important keeping in view the upcoming International Monetary Fund’s (IMF) review mission for holding parleys with Pakistani authorities by the end of February or March 2025. It is yet to see how the IMF responds to the FBR’s slippages.

However, high-ups in the Ministry of Finance have argued that the overall fiscal framework has remained aligned mainly because of a reduction in debt servicing in the wake of reduced policy rates coming down from 22% to 12% with six consecutive reductions. It has reduced the woes of the economic managers but the IMF would raise the issue of revenue shortfall occurring on the FBR fronts.

Under the IMF programme’s indicative target, the FBR’s indicative target for March 2025 has been envisaged at Rs9,168bn. Now the FBR requires a whopping collection of Rs2,772bn in the next two months (Feb and March) for materialising the agreed target with the Washington-based lender.

Pakistan and the IMF have envisaged an annual tax collection target of Rs12,970bn — Rs12,913bn agreed with the IMF — for the current fiscal year.

Keeping in view a collection of Rs6,496bn in the first seven months, the FBR will have to collect Rs6,474bn in the remaining five months — Feb to June — 2025 to display the desired target of Rs12,970bn on June 30, 2025.

The FBR has not yet released any official provisional revenue collection figures for January 2025. The revenue collection stood at Rs800 billion a couple of days ago but the collection gained momentum and it reached Rs872bn till January 31, 2025.

It is expected that a few billion more may come into the national kitty and the collection might touch Rs875bn for January 2025. The FBR had paid out refunds of Rs272bn in the first six months of the current FY.

After striking a deal with banks, the FBR collected Rs72bn on their profits during the current fiscal year after the promulgation of an ordinance for fixing a rate of 44% in the current fiscal year on their profits.