FBR collects Rs13 trillion but misses IMF tax target by Rs975 billion

The Federal Board of Revenue (FBR) collected around Rs13 trillion in FY2025-26, meeting the government’s twice-revised target but missing the IMF-linked tax collection target by nearly Rs975 billion.

According to provisional figures, the FBR’s net collection stood at about Rs13.001 trillion to Rs13.003 trillion for the fiscal year that ended on Tuesday.

The government had initially set the FBR target at Rs14.13 trillion in June last year. The IMF later revised it down to Rs13.979 trillion and maintained that level during the May review talks.

However, FBR officials said the annual target was later reduced to Rs12.957 trillion for FY2025-26, which the tax machinery achieved. The June target of Rs1.757 trillion was also met, according to officials.

The FBR spokesperson said the Rs12.983 trillion figure was the revised estimate for FY2025-26 carried in the Annual Budget Statement and approved by parliament as part of the federal budget process.

The collection represented a 10.7% increase over the previous fiscal year, but the growth remained lower than the nominal economic growth rate of 14%.

The FBR’s tax-to-GDP ratio also slipped marginally to 10.2% during the year.

In dollar terms, the government had assigned the FBR a tax target equivalent to $50 billion, but the tax authority collected around $46 billion, leaving a shortfall of about $4 billion.

The FBR issued refunds worth Rs588 billion during the year, up Rs115 billion from the previous year. Officials said refunds of more than Rs40 billion were issued to facilitate the business community, particularly exporters.

All major tax heads missed their respective targets.

Income tax collection stood at around Rs6.6 trillion, missing the target by Rs323 billion. Receipts were 13.5% higher than last year, including super tax recovered after a favourable court ruling.

Sales tax collection reached Rs4.265 trillion, falling short of the target by Rs494 billion. The collection was 9.3% higher than last year.

Federal excise duty collection stood at Rs840 billion, up 9.7%, but missed the target by Rs51 billion.

Customs duty collection was Rs1.33 trillion, falling short by Rs108 billion, with growth of less than 1% despite an increase in the import bill.

The government offset part of the tax shortfall by increasing petroleum levy rates and sharply reducing development spending to meet the overall primary budget surplus target agreed with the IMF.

The FBR now faces a higher tax collection target of Rs15.264 trillion for FY2026-27, which the government says is linked to additional spending needs for border security, water security, food security and fuel security.