Islamabad, Feb 1: The Federal Board of Revenue (FBR) faced a significant shortfall in tax collection for January, falling Rs. 80 billion short of its Rs. 956 billion targets. According to sources, the FBR managed to collect Rs. 872 billion, highlighting ongoing fiscal challenges.
In the first seven months of the fiscal year (July–January), the FBR accumulated Rs. 6,496 billion in revenue, missing its target of Rs. 6,964 billion by Rs. 465 billion. Despite this shortfall, the board reported a robust 29% monthly growth in tax collection and a 26% increase compared to the same period last year.
This growth aligns with the International Monetary Fund’s (IMF) conditions regarding Pakistan’s tax-to-GDP ratio.
Monthly Tax Collection Trends
In December, the FBR collected Rs. 1,328 billion, falling Rs. 42 billion short of its Rs. 1,370 billion target. This consistent shortfall raises concerns about Pakistan’s ability to meet its annual tax revenue goals.
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Meanwhile, the Large Taxpayer Office (LTO) Karachi achieved a record-breaking tax collection, reporting a 20% increase compared to the previous year. During the first five months of the 2024–25 fiscal year, LTO Karachi collected Rs. 1,110 billion, a significant jump from Rs. 924 billion in the corresponding period last year.
In a controversial move, the FBR had planned to purchase 1,010 vehicles for its officers, despite its revenue struggles. The Senate Standing Committee on Finance intervened, leading to an indefinite freeze on vehicle procurement. Chairman FBR Rashid Langrial confirmed that purchases would remain suspended until the Public Procurement Regulatory Authority (PPRA) clarifies the rules governing such acquisitions.
The FBR had initially approved the purchase of 1200cc vehicles on January 13, 2025, allocating Rs. 3 billion upfront with the remaining amount to be paid in installments. However, the decision faced backlash, given the ongoing revenue shortfall.
As Pakistan grapples with revenue collection challenges, the FBR’s shortfall underscores the need for stronger enforcement and policy reforms. While some sectors, like LTO Karachi, have shown promising growth, the overall tax deficit remains a pressing concern for the country’s economic stability.
