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ISLAMABAD: The FBR tax shortfall has soared to a staggering Rs833 billion during the first 10 months of the fiscal year, despite the government’s record-high additional taxes and reduced refunds. Tax chief Rashid Langrial warned that meeting revenue targets in the upcoming budget would also be highly challenging.
The FBR tax shortfall has exceeded the International Monetary Fund (IMF) threshold by over Rs190 billion. Last month, the IMF officially recognized that the original annual target of Rs12.97 trillion was unattainable and adjusted it downward.
In April alone, the government added roughly Rs139 billion to the tax shortfall, breaching its prior commitment to the IMF that the deficit would not surpass Rs640 billion against the initial annual goal.
FBR’s Collection Performance and Challenges Ahead
According to provisional figures, the Federal Board of Revenue (FBR) has collected Rs9.3 trillion in taxes by the end of April, falling short by Rs833 billion. Although the collection is about 27% higher, or Rs1.95 trillion more, than the same period last year, it remains insufficient to stay aligned with fiscal targets.
Speaking before the National Assembly Standing Committee on Finance on Wednesday, FBR chairman Rashid Langrial acknowledged that collecting taxes will remain tough not just this year but also in the next fiscal cycle. He added that the difficult situation would severely limit the government’s ability to provide tax relief in the upcoming budget. “However, we are planning to reduce taxes on the salaried class,” Langrial said, without specifying the extent of the relief.
By the end of March, the salaried class had contributed a record Rs391 billion in taxes, 56% or Rs140 billion more compared to the previous year, and 1,420% higher than the amount paid by traders. Despite imposing an additional Rs1.3 trillion in taxes in the last budget, the FBR still ended up with an Rs833 billion shortfall.
