Islamabad, January 1, 2026 – The Federal Board of Revenue (FBR) has fallen short of its tax collection target for the first half of fiscal year 2025-26 (July-December 2025) by approximately Rs336 billion, according to data from research firm Ismail Iqbal Securities. The chart highlights a cumulative collection of Rs6,154 billion against a revised target of Rs6,490 billion, raising concerns over fiscal performance amid ongoing economic challenges.
Persistent Monthly Shortfalls Highlight Structural Issues
The bar chart illustrates consistent underperformance across most months in 1HFY26. Notable shortfalls include December 2025 (Rs1,421 billion collected vs. Rs1,446 billion target) and peaks like June 2025 showing a surplus of Rs206 billion. However, deficits in months such as July, August, and November dominated, with figures like Rs673 billion collected in July-24 against higher targets. Analysts attribute this to lower-than-expected inflation, sluggish industrial growth, and reduced imports impacting customs duties. Despite some growth in direct taxes and corporate payments, overall revenue mobilisation remained weak. This marks the continuation of a trend where the FBR has struggled to meet ambitious targets set in consultation with the International Monetary Fund (IMF).
Implications for Annual Target and Potential New Measures
The Rs336 billion gap in the first half has prompted a downward revision of the full-year FY26 target from around Rs14.13 trillion to Rs13.979 trillion. With the IMF scheduled to review Pakistan’s fiscal indicators soon, experts warn of possible additional tax measures in the coming quarters to bridge the deficit. This could include enhanced enforcement, broader taxation on untaxed sectors, or mini-budgets. The shortfall underscores the need for structural reforms to widen the tax net, improve compliance, and boost economic activity. While collections showed year-on-year growth in some areas, sustained shortfalls risk widening the fiscal deficit and straining debt servicing obligations. Policymakers face pressure to balance revenue needs with growth stimulation in a low-inflation environment.