The Federal Board of Revenue (FBR) has missed its revenue collection target for the first half of fiscal year 2024-25 by nearly Rs. 386 billion, according to provisional figures released on Tuesday.
The FBR collected Rs. 5.623 trillion between July and December against the target of Rs. 6.009 trillion. While it couldn’t meet the target, FBR’s collection was still 26 percent higher than the corresponding period last year, when Rs. 4.466 trillion was collected.
The tax body has attributed the shortfall to reduced tax collection from imports due to a slowdown in trade, sluggish manufacturing growth and unexpectedly low inflation. Another factor is the government’s failure in collecting forecast tax revenue from traders from July to December under the Tajir Dost Scheme.
According to the figures made public, the FBR had a shortfall of Rs. 47 billion in December, with Rs. 1.326 trillion collected against a target of Rs. 1.373 trillion.
Analysts have warned the cumulative shortfall risks derailing the government’s program with the International Monetary Fund (IMF). Under the bailout agreement, Pakistan budgeted a 40 percent increase in tax revenue for this fiscal year, which seems increasingly out of reach. An IMF team will visit Islamabad in February or March to conduct its first review of the 37-month $7 billion Extended Fund Facility.
The FBR, per the data, paid Rs. 273 billion in refunds to taxpayers in the first half of the ongoing fiscal year, up from Rs. 234 billion in the same period last year. In December alone, the FBR paid Rs. 70 billion in refunds compared to Rs. 38 billion in the same month last year.
Government officials maintain the forecast tax revenue can be achieved as industry picks up and imports grow in the second half of FY25.