ISLAMABAD: The Federal Board of Revenue (FBR) faced a significant tax shortfall of Rs 386 billion in the first half of the current financial year (July-December). Revenue collection stood at Rs 5,623 billion, which is short of the target of Rs 6,009 billion.
The IMF has indicated Rs 6,009 billion by the end of December 2024, but the FBR received a net collection of Rs 5,623 billion during the first six months of the current fiscal year (CFY). It is not yet known how much the FBR collected through advance collection as it was estimated to face a shortfall of over Rs 400 billion in the first half of the current fiscal year.
FBR disbursed refunds worth Rs 272 billion in the first six months of CFY. After striking a deal with banks, the FBR collected Rs 72 billion during the current financial year after implementing an ordinance to fix a rate of 44 percent on their profits.
Top government sources said that the FBR received Rs 275 billion on December 31, 2024, which enabled the increase in collections. It collected Rs 1,326 billion against the set target of Rs 1,373 billion, seeing a shortfall of Rs 47 billion in December 2024. “FBR has demonstrated its ability to collect more revenue and reduce its expected shortfall of Rs 80-90 billion to just Rs 47. billion in December,” sources said.
In the first six months of this financial year, FBR has collected Rs 2826.5 billion in income tax, Rs 2105.4 billion in sales tax, Rs 346.6 billion in federal excise duty and Rs 617.2 billion in customs duty. The total receipts stood at Rs 5,895 billion. After paying Rs 272 billion as refunds, the net recovery stood at Rs 5,623 billion.
A senior FBR official claimed that net revenue collection has improved till the latest data is available as collections have reached Rs 5,623 billion against the target of Rs 6,009 billion agreed with the IMF. It remains to be seen how the international lender will react when its review mission visits Pakistan in the second week of February.
Pakistan and the IMF had agreed that emergency measures would be announced to meet the revenue shortfall of more than 2 percent of the target. They may discuss lowering the tax collection target as desired by Islamabad, but the IMF may pursue additional taxation measures to achieve the desired tax collection target of Rs 12,970 billion by June 30, 2025.
Advisor to Finance Minister Khurram Shahzad said that FBR’s tax collection in the month of December 24 was Rs 1,328 billion, which has achieved 97 percent of the monthly target. He added that the collection on December 24 is also the highest in a month.