By Staff Reporter
ISLAMABAD: The Federal Board of Revenue (FBR) posted a 16% rise in tax collections for January, reaching Rs1.015 trillion and beating the previous six months’ average growth rate, officials said, signalling a potential turnaround in meeting fiscal targets despite missing the monthly goal.
The January haul, up from Rs873 billion a year earlier, fell short of the Rs1.030 trillion target by Rs15 billion, according to provisional data released by the FBR. Still, the performance marked a revival in revenue momentum, outpacing the 10-11% average growth seen over the first half of the fiscal year that ends in June.
An FBR statement described the results as a “nuanced and strategically significant fiscal outcome,” pointing to a substantial increase in direct taxation, modest gains in indirect and excise streams, and an overall improved showing that reinforced the agency’s reform-driven mobilisation efforts.
For the first seven months of fiscal 2026, the FBR collected Rs7.176 trillion, missing its Rs7.521 trillion target by Rs345 billion but representing an 11% increase over the Rs6.490 trillion gathered in the same period last year.
The shortfall stemmed largely from weaker domestic sales tax collections, the temporary suspension of a super tax, and other factors, officials said. However, a recent Federal Constitutional Court ruling upholding the super tax is projected to yield about Rs300 billion, which could help close much of the seven-month gap.
The International Monetary Fund, in its latest review, had already trimmed the FBR’s annual tax target by Rs150 billion. In the prior fiscal year, the agency fell short of its revised Rs11.900 trillion goal by Rs163 billion, collecting Rs11.737 trillion—a 26.19% jump from Rs9.301 trillion in fiscal 2024.
Breaking down the seven-month figures, the FBR issued Rs339 billion in refunds, an 8% rise from Rs314 billion a year ago. Income tax receipts totalled Rs3.512 trillion, undershooting the Rs3.639 trillion target by Rs127 billion but up 11% year-on-year. Sales tax collections came in at Rs2.447 trillion, missing the mark by Rs198 billion, yet 10% higher than the previous year’s Rs2.219 trillion. Customs duties reached Rs752 billion, short by Rs28 billion but 6% above last year’s level. Federal Excise Duty bucked the trend, exceeding expectations at Rs465 billion—a 15% increase from Rs404 billion in the prior period.
January’s standout was income tax, which surged 26% to Rs483 billion from Rs381 billion a year earlier, underscoring the impact of the FBR’s structural reforms, including beefed-up enforcement and efforts to resolve litigation-blocked collections. Sales tax for the month rose 12% to Rs360 billion from Rs322 billion, a development the FBR linked to a rebound in large-scale manufacturing—a key economic indicator showing signs of recovery.
FBR officials attributed the broader improvements to investments in digital infrastructure and enforcement, which they said were boosting compliance, widening the tax base, and building taxpayer confidence. The shift toward stronger direct taxes hinted at growing voluntary adherence, with possible knock-on effects in the coming months. The agency expressed optimism that sustained growth in large-scale manufacturing would sustain the revenue uptick and aid in hitting full-year targets. “Team FBR is fully committed to continue this momentum of growth in the remaining months,” the statement said.
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