ISLAMABAD: The Federal Board of Revenue (FBR) is facing mounting pressure after recording a significant revenue shortfall in February 2026, coinciding with the visit of an International Monetary Fund (IMF) mission conducting the third review under Pakistan’s $7 billion Extended Fund Facility (EFF) programme.
According to provisional figures, the FBR collected Rs918 billion during the first 27 days of February against a monthly target of Rs1.029 trillion, resulting in a shortfall of Rs111 billion. Officials expect total collections to reach around Rs950 billion by month-end, which would still remain below the assigned target despite improved recovery efforts.
In an attempt to boost tax receipts before closing the month, the FBR directed all Large Taxpayer Offices (LTOs), Medium Taxpayer Offices (MTOs), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs) to remain operational on Saturday, February 28, treating it as a normal working day to facilitate tax and duty payments.
For the first eight months of FY2025-26 (July–February), provisional tax collection reached Rs8,094 billion against a target of Rs8,550 billion, creating a cumulative shortfall of Rs456 billion. During the first seven months alone, revenue stood at Rs7,176 billion compared to the target of Rs7,521 billion, reflecting a gap of Rs345 billion.
Officials linked the slowdown in February collections partly to government instructions restricting tax authorities from attaching bank accounts during the month, despite a favorable ruling by the Federal Constitutional Court regarding the Super Tax. While significant Super Tax revenue was realized in January, February collections remained subdued, with only Rs40 billion collected against a Rs70 billion target for the next installment.
The revenue performance is expected to remain a central issue during ongoing IMF review discussions in Islamabad. Continued shortfalls may compel the Ministry of Finance to either seek further downward revision in annual tax targets or introduce expenditure controls to maintain agreed fiscal deficit and primary balance commitments.
Previously, the IMF revised Pakistan’s annual tax collection target from Rs14,130 billion to Rs13,979 billion for the current fiscal year. Any further adjustment could increase pressure on development spending, particularly the Public Sector Development Programme (PSDP), which typically faces cuts during fiscal consolidation measures.
With IMF negotiations underway, the coming weeks are considered critical for the FBR as authorities attempt to narrow the revenue gap and demonstrate Pakistan’s commitment to fiscal discipline and economic reforms.
