Six-month tax collection falls short by Rs386bn

Total revenue collection amounted to Rs5,623 billion, falling short of Rs6,009 billion target

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An undated image of the Federal Board of Revenue (FBR) building in Islamabad. — APP
An undated image of the Federal Board of Revenue (FBR) building in Islamabad. — APP
  • The FBR fetched Rs275 billion on December 31, 2024.
  • Rs1,326bn collected in Dec, falling Rs47bn short of target.
  • FBR refunded Rs272bn in the first six months of CFY.

ISLAMABAD: The Federal Board of Revenue (FBR) recorded a substantial tax shortfall of Rs386 billion during the first half of the current fiscal year (July-December), The News reported. 

Total revenue collection amounted to Rs5,623 billion, falling short of the target of Rs6,009 billion.

The International Monetary Fund (IMF) had set an indicative target of Rs6,009 billion for the period ending December 2024. However, the FBR's net collection reached only Rs5,623 billion over the first six-month period the current fiscal year (CFY). 

Projections had already indicated a potential shortfall exceeding Rs400 billion, and it remains unclear how much of the revenue was collected through advance taxes.

The FBR paid out refunds of Rs272 billion in the first six months of CFY. After striking a deal with banks, the FBR collected Rs72 billion during the current fiscal year after the promulgation of an ordinance for fixing the rate of 44% on their profits.

Top official sources said that the FBR fetched Rs275 billion on December 31, 2024, making increased collection possible. It collected Rs1,326 billion against the set target of Rs1,373 billion, witnessing a shortfall of Rs47 billion in December 2024. 

“The FBR has demonstrated its ability to collect more revenues and reduce its projected shortfall of Rs80-90 billion to just Rs47 billion in December,” said the sources.

The FBR has collected Rs2,826.5 billion as Income Tax, Sales Tax of Rs2,105.4 billion, Federal Excise Duty of Rs346.6 billion and Customs Duty of Rs617.2 billion in the first six months of the current fiscal. 

The gross collection stood at Rs5,895 billion. After paying Rs272 billion in refunds, the net collection stood at Rs5,623 billion.

One top official of the FBR contended that the net revenue collection improved till receiving the latest figures as the collection went up to Rs5,623 billion against the assigned target of Rs6,009 billion agreed with the IMF. 

It remains to be seen how the international lender would respond when its review mission visits Pakistan probably in the second week of February.

Pakistan and the IMF had agreed that if the revenue shortfall exceeds 2% against the assigned target, then contingency measures would be announced to bridge it. 

They may discuss reduction in the tax collection target as desired by Islamabad but the IMF may pursue additional taxation measures to achieve the desired tax collection target of Rs12,970 billion by June 30, 2025.

Adviser to the finance minister Khurram Schehezad said FBR tax collection for the month of Dec 24 clocked in at Rs1,328 billion, achieving 97% of the monthly target. 

He added that collection for Dec 24 is also the highest in a single month.