FBR adjusts targets amid Rs196 billion shortfall in first four months of FY25

ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a range of short- and long-term strategies to address an expected revenue shortfall of over Rs230 billion for the second quarter of ongoing fiscal year.

Last month, the FBR collected Rs877 billion in taxes falling short of its Rs980 billion target by Rs103 billion. Over the first four months of the FY25, Rs3,440 billion was collected against a target of Rs3,636 billion, reflecting a deficit of Rs196 billion.

Economic indicators like GDP growth, imports, inflation and large-scale manufacturing have shifted, leading FBR to adjust tax collection target.

The authority expected additional revenue from increased tax rates, enforcement measures and import-based growth but these assumptions have now been revised.

A significant shortfall was observed in Sales Tax collection at the import stage, which missed its target by Rs147 billion in the first quarter. However, income tax collection exceeded expectations, reaching Rs1,230 billion versus the target of Rs1,098 billion.

The FBR has not halted tax refunds to boost revenues despite the shortfall. On November 1st, Rs32 billion in pending sales tax refunds were disbursed to exporters.

A new enforcement law has been reviewed by the Law Division and will be introduced through a presidential ordinance or parliamentary approval.

The FBR’s intelligence unit, led by a senior official, is cracking down on tax fraud, with cases amounting to Rs75 billion being investigated.

Additionally, the FBR has identified 190,000 high-net-worth individuals for tax notices, expecting to recover Rs7 billion from non-filers.

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