ISLAMABAD: The Federal Board of Revenue (FBR) is expected to fall short of its tax collection goal by more than Rs255 billion in the first five months of the current fiscal year. FBR is predicted to miss its goal of Rs1,003 billion for November alone by around Rs150 billion. By November 25th, 2024, the FBR had collected over Rs550 billion, against the assigned target of Rs. 1,003 billion for the month.
With October’s revenues coming in at Rs. 877 billion, Rs. 103 billion short of the Rs. 980 billion goal, FBR has already reported a deficit of Rs. 102 billion for the last four months. The total collection for the first four months of the fiscal year is Rs. 3,440 billion, which is 196 billion less than the target of Rs. 3,636 billion.
The FBR has an enormous challenge, meeting the November objective without enacting new taxes or a mini-budget because the administration has repeatedly said that no such measures would be enacted in the second quarter of the fiscal year. To offset the projected shortfall, the FBR has still taken short-term steps, including notifying 5,000 non-filers who are thought to owe Rs7 billion in taxes.
Even while recent unrest in Islamabad had little effect on total revenues, tax collections in both Lahore and Islamabad have suffered. However, FBR still relies heavily on Karachi for its earnings. To reduce the revenue gap, the government is also considering raising the federal excise duty (FED) on sweetened drinks and the withholding tax rates on the import of services, raw materials, and equipment. Potentially, this might bring in an extra Rs10.8 billion per month.
With an expected total of Rs850 billion, tax authorities predict that November’s revenues would be well below the monthly goal. Contingency revenue measures, which are expected to have an effect of Rs97.2 billion in the last three quarters of 2024–2025, are being implemented while FBR works to rectify these issues.
