FBR surpasses July revenue target with Rs755b collection amid growing tensions with traders

ISLAMABAD – In a promising start to the fiscal year 2025-26, the Federal Board of Revenue (FBR) reported revenue collection of Rs755 billion for July—exceeding its monthly goal of Rs748 billion. This marks a Rs96 billion, or 15%, increase from the same period last year.

Despite the early success, clouds remain on the horizon. The government’s full-year tax target stands at Rs14.13 trillion—a steep 20% jump from last year. Achieving that will require consistent growth and smoother relations with the country’s business community, which is increasingly vocal against controversial tax measures.

According to provisional data, the FBR hit its sales tax and customs duty goals but missed the mark in income tax and federal excise duty. Income tax brought in Rs300 billion—Rs15 billion below target—mainly due to advance collections made in June. Still, it was 5.6% higher than last year. Federal excise duty also missed its goal by Rs5 billion, landing at Rs46 billion, though that still reflects a 25% increase year-over-year.

On the upside, sales tax revenues hit Rs302 billion—Rs12 billion over target and 18% more than the previous July. Customs duty posted the strongest performance, totaling Rs106 billion—Rs14 billion over target and up 31% from a year earlier, thanks to the clearance of held-back imports.

However, ongoing disputes with traders threaten to undermine momentum. Businesses have criticized the FBR’s expanded powers, including arrest provisions tied to sales tax fraud and the inclusion of 50% of cash expenses over Rs200,000 in taxable income. Many also oppose the placement of tax officers in shops and offices, calling it harassment.

To ease tensions, a government committee recommended raising the cash expense threshold to Rs2.5 million and forming a redressal body for complaints. Yet the FBR has yet to issue a promised explanatory circular, missing the July 24 deadline.

Meanwhile, FBR Chairman Rashid Langrial was absent this week due to illness, and Dr. Hamid Ateeq Sarwar—who retired recently—continues unofficially managing operations as the government finalizes his contractual reappointment.

With the economy still weighed down by IMF-imposed stabilization policies, the FBR’s revenue drive faces both internal and external pressures. While July’s results are encouraging, stronger collaboration with businesses will be critical for sustaining growth in the months ahead.