Pakistan’s Federal Board of Revenue (FBR) collected Rs4.06 trillion in taxes during the first four months of FY2026–27, falling Rs124 billion short of its target despite a 6% increase compared with the previous year.
In October alone, tax collection reached Rs974 billion against the target of Rs1.132 trillion, leaving a shortfall of Rs158 billion. FBR expects an additional Rs20–25 billion from income tax returns filed on the final day of the extended deadline.
Among major revenue sources, sales tax performed well, generating Rs1.515 trillion and exceeding its target by Rs67 billion. However, income tax collections remained weak at Rs1.85 trillion, falling Rs165 billion below expectations. Customs duty also missed its target, while federal excise duty broadly met expectations.
For FY2026–27, the government has set an ambitious tax collection target of Rs15.263 trillion. However, internal estimates suggest that FBR may collect only Rs14.3 trillion to Rs14.6 trillion by June 2027.
The revenue shortfall has increased pressure on FBR, particularly as the IMF has linked approval of Pakistan’s sixth loan tranche to meeting its first-half tax collection target.
Improving tax compliance, expanding the tax base and strengthening revenue collection will be essential for Pakistan to achieve its fiscal targets and maintain economic stability.