The Federal Board of Revenue (FBR) failed to meet its tax collection target for December 2024, adding to an ongoing revenue shortfall for the first half of the fiscal year.
In December, the FBR collected Rs1.326 trillion, falling short of the Rs1.373 trillion target by Rs47 billion. However, this marks a significant 35% increase compared to the Rs984 billion collected in December of the previous year.
Breaking down the monthly collections, the FBR recorded Rs996 billion in July 2024 against a target of Rs985 billion, Rs782 billion in August against Rs898 billion, Rs1,106 billion in September against Rs1,098 billion, Rs878 billion in October against Rs980 billion, and Rs855 billion in November against a target of Rs1,003 billion.
Cumulatively, the FBR collected Rs5.623 trillion during the first half from July to December in the fiscal year 2024-25. This figure is Rs386 billion below the assigned target of Rs6.009 trillion for the period.
In the first half of FY25 (July-December), income tax collections reached Rs2.780 trillion, surpassing the target of Rs2.524 trillion by Rs256 billion. This marks a 29% increase compared to Rs2.149 trillion collected during the same period last year.
Sales tax collections for the period totaled Rs1.898 trillion, falling short of the target by Rs380 billion. Despite the shortfall, sales tax collections grew by 25% compared to Rs1.514 trillion collected last year. Customs duty collections also missed the target by Rs155 billion, amounting to Rs598 billion during the six-month period.
The revenue shortfall is primarily attributed to lower tax collection from imports, driven by a slowdown in trade, weak manufacturing growth, and unexpectedly low inflation, which has recently fallen to single digits.
The FBR disbursed Rs273 billion in refunds during the first half of FY25, reflecting a 16.66% increase compared to Rs234 billion during the same period last year.Â
In December alone, the FBR issued Rs70 billion in refunds, up from Rs38 billion in the same month last year, marking an 84% rise.
The government anticipates generating an additional Rs3.659 trillion in revenue for FY25, driven by three key factors: projected GDP growth of 3%, large-scale manufacturing expansion at 3.5%, and inflation estimated at 12.9%.Â
Additionally, imports are expected to grow by 16.9%, contributing significantly to the projected revenue increase of Rs1.863 trillion.
