By Staff Reporter
ISLAMABAD: The Federal Board of Revenue fell short of its revenue target by Rs612 billion in the first nine months of fiscal 2026, the latest sign of mounting pressure on the government’s finances as conflict-related uncertainties weigh on economic activity.
Provisional data show the FBR collected Rs9.305 trillion from July through March, a 10 percent rise from Rs8.449 trillion in the same period a year earlier. The haul nevertheless missed the nine-month target of Rs9.917 trillion by a wide margin. The shortfall is expected to strain public finances, widen the fiscal deficit and constrain the government’s ability to meet its expenditure commitments.
March proved particularly weak. Collections rose 6 percent to Rs1,182 billion from Rs1,115 billion a year earlier but fell Rs185 billion short of the monthly target of Rs1.367 trillion. The FBR expects to add another Rs2 billion to Rs3 billion once final figures are compiled.
Officials attributed the March shortfall to war-related uncertainties and supply-chain disruptions that slowed economic activity, with both customs duty and sales tax registering declines. Gross sales-tax collections in March were slightly higher than a year ago, but larger refund payments more than offset the gain. Total refunds reached Rs61 billion in the month, up from Rs34 billion in March 2025. Higher refunds were issued deliberately to help businesses stay afloat amid the uncertainties.
The performance leaves the FBR with limited room for error in the final quarter. In its most recent review, the International Monetary Fund already cut the full-year tax-collection target by Rs150 billion. The agency’s track record offers little comfort: in fiscal 2025 it missed its target by nearly Rs163 billion even after two downward revisions, collecting Rs11.737 trillion against a revised goal of Rs11.900 trillion. That figure still represented a 26.19 percent increase from Rs9.301 trillion in fiscal 2024.
Refunds and rebates to taxpayers climbed 15.8 percent to Rs447 billion in the nine-month period, from Rs386 billion a year earlier. The surge in payouts contributed to the net revenue shortfall even as gross collections in some categories posted gains.
Income-tax receipts reached Rs4.636 trillion, missing the Rs4.871 trillion target by Rs235 billion but rising 12 percent from Rs4.125 trillion a year ago. Sales-tax collections totalled Rs3.104 trillion, Rs313 billion below the Rs3.417 trillion projection and up 9 percent from Rs2.860 trillion. Customs duties came in at Rs956 billion, Rs70 billion short of the Rs1,026 billion target, though they edged 3 percent higher than the Rs927 billion collected in the prior year. Federal excise duty was the sole category to beat its target, rising 13 percent to Rs608 billion from Rs537 billion and exceeding the Rs603 billion projection by Rs5 billion.
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