FBR misses April target by Rs139bn, ten-month shortfall climbs to Rs833bn

Pakistan’s tax shortfall has widened to Rs833 billion in the first 10 months of the fiscal year, despite the imposition of record additional taxes and a reduction in refunds, the Federal Board of Revenue (FBR) reported on Thursday. 

The April shortfall alone was Rs139 billion, bringing the total gap well beyond the Rs640 billion ceiling agreed with the International Monetary Fund (IMF).

Provisional data shows that FBR collected Rs9.3 trillion from July to April, falling short of its target by Rs833 billion. While this reflects a 27% increase — or Rs1.95 trillion — over the same period last year, it still fails to keep pace with revenue commitments. 

The IMF has already revised down Pakistan’s annual tax target from Rs12.97 trillion, accepting that the original figure was no longer realistic.

April’s revenue collection stood at Rs844 billion against a target of Rs983 billion. The FBR released Rs43 billion in refunds — equal to the amount disbursed in April last year — despite the monthly collection growing by 29%. Total refunds for July to April reached Rs428 billion, slightly higher than the previous year.

Despite these measures, the FBR sustained the shortfall after placing an additional Rs1.3 trillion tax burden in the previous budget, which included levies on essential items like milk. The salaried class contributed Rs391 billion in taxes by March — 56% or Rs140 billion more than last year — and paid 14 times more than what was collected from traders.

Income tax emerged as the only revenue stream where FBR exceeded its target, collecting Rs4.48 trillion — Rs325 billion more than the target and Rs973 billion more than the previous year. The salaried and corporate sectors largely drove this growth, while retailers and landlords remained largely under-taxed.

Sales tax collection reached Rs3.17 trillion, falling Rs775 billion short of the target, largely due to lower-than-expected growth in large-scale manufacturing. Despite the increased burden, sales tax revenue rose Rs677 billion compared to last year.

The FBR also collected Rs602 billion in federal excise duty, Rs157 billion short of its target, though still higher than last year’s figures by Rs149 billion. Customs duties amounted to Rs1.05 trillion, which was Rs228 billion below target. 

The shortfall was attributed to lower import volumes and manipulation of import declarations in collusion with corrupt officials. Despite this, customs revenue still showed a year-on-year increase of Rs190 billion.