ISLAMABAD: The Federal Board of Revenue (FBR) has fallen short of its monthly revenue target by Rs65 billion, reflecting weak enforcement, reduced industrial activity, and a sharp decline in electricity consumption.
According to provisional data, the FBR collected Rs1.635 trillion against a target of Rs1.7 trillion by the end of August. Officials said the gap may narrow slightly once final figures are compiled, bringing the shortfall closer to Rs45–50 billion.
Although collections were nearly 13% higher than last year, the pace remains below requirements, with overall growth expected to hover around 15%. The sluggish start is concerning, especially after the FBR missed its annual target last year by Rs1.2 trillion.
The shortfall comes just weeks before the IMF’s second programme review in September, where Pakistan’s fiscal performance will be closely scrutinized. Tax authorities admitted the FBR remains a “weak link” in meeting revenue benchmarks.
Causes of the shortfall
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Electricity-based tax collection fell sharply to Rs86 billion compared to Rs125 billion last year.
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Industrial slowdown has suppressed tax inflows from production and consumption.
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Reversals of enforcement measures, including delays in implementing restrictions on asset-linked purchases, weakened compliance.
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Traders’ protests also forced the government to soften banking transaction requirements.
Finance Minister Muhammad Aurangzeb had earlier warned that if enforcement measures were blocked, the government might need additional steps worth Rs400–500 billion. While Parliament passed most proposals, several were rolled back under pressure from the business community.
Breakdown of collections
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Income tax: Rs695 billion (on target).
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Sales tax: Rs625 billion (Rs65b short).
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Federal excise duty: Rs113 billion (slightly under target due to weaker sales of taxed goods).
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Customs duty: Rs200 billion (above target, boosted by clearance of previously stalled cargoes).
Despite customs providing relief, the FBR still missed its monthly target of Rs951 billion, collecting only Rs887 billion, a growth of just 12%.
Refund payments were also lower — Rs37 billion in August compared to Rs53 billion last year. Cumulative refunds for July–August stood at Rs118 billion, about 11% less than the previous fiscal year.
Meanwhile, the government has tasked Dr Hamid Ateeq Sarwar, rehired after retirement, with three critical roles, including heading Pakistan Revenue Automation Limited and overseeing inland revenue operations, which contribute around 80% of total taxes.