ISLAMABAD: The Federal Board of Revenue (FBR) has faced a widening shortfall in tax collection, recording Rs950 billion in October 2025 against the monthly target of Rs1,026 billion — a deficit of Rs76 billion. This has pushed the total shortfall for the first four months (July–October) of the current fiscal year (FY26) to Rs274 billion.
According to provisional figures, the FBR had already recorded a shortfall of Rs198 billion in the first quarter of FY26, which widened further by Rs76 billion in October. FBR Chairman Rashid Mahmood Langrial told *The News* on Friday night that total tax collection for the month was expected to reach Rs952 billion after final adjustments.
In the first four months of the current fiscal year, the FBR has collected Rs3.840 trillion against the fixed target of Rs4.109 trillion, resulting in a shortfall of Rs269 billion so far. The government had set an ambitious annual tax collection target of Rs14.13 trillion for FY26, approved by Parliament. However, after the second review of the $7 billion Extended Fund Facility (EFF) with the International Monetary Fund (IMF), the target was revised downward.
As part of the IMF agreement, the government committed to implementing contingency revenue measures from January 1, 2026, if tax collection continues to lag in the first half of FY26 (July–December). These measures include increasing GST on solar panels from 10% to 18%, raising taxes on the telecom sector, and enhancing the Federal Excise Duty (FED) on fertilizers and pesticides. The IMF had also proposed a one percent increase in the general GST rate — from 18% to 19% — but the government rejected it. The Fund also dismissed the government’s proposal to impose a flood levy during the second review talks.
Breaking down the October 2025 figures, the FBR collected Rs430 billion in income tax, Rs345 billion in sales tax on imports and domestic production, Rs70 billion in Federal Excise Duty, and Rs109 billion in customs duty. Refund payments amounted to Rs48 billion in October, up from Rs19 billion in the same month last year.
Regional performance varied across tax offices. While the Large Taxpayer Units (LTUs) in Islamabad, Lahore, and Karachi underperformed, several Regional Tax Offices (RTOs) — including Lahore, Karachi RTO-1, and Gujranwala — showed improved results. However, Sialkot and Faisalabad RTOs fell short of their targets. Meanwhile, the FBR announced an extension for filing income tax returns, citing strong taxpayer engagement. As of October 31, 2025, a record 5.9 million tax returns were filed — a 17.6% increase from last year’s 5 million. Out of these, 3.6 million taxpayers filed returns with tax payments, reflecting an 18.6% rise in paying filers. Individual taxpayers contributed nearly Rs69 billion, up 15% from Rs60 billion last year.
The FBR credited this growth in compliance to a comprehensive outreach campaign led by the Prime Minister’s Office, the Ministry of Information, and the FBR itself. The campaign utilized robocalls, WhatsApp messages, and behaviorally informed communication nudges to remind citizens of their civic duty. Nearly 800,000 personalized messages and 70,000 targeted emails were sent to encourage timely and accurate tax filing.
The FBR expressed appreciation for citizens’ growing cooperation and reaffirmed its commitment to promoting a fair, transparent, and digital tax system. While the Prime Minister has directed that no blanket extension be granted for return filing, taxpayers facing genuine hardships may apply for an extension through the FBR’s IRIS system.
