FBR reports Rs198 billion shortfall in Q1 tax collection for FY 2025-26

Pakistan’s Federal Board of Revenue (FBR) has provisionally collected Rs2.88 trillion in tax revenue during the first quarter of the fiscal year 2025-26, falling short of its target of Rs3.083 trillion by Rs198 billion, according to the data released on Wednesday.

In September 2025 alone, the FBR collected Rs1.23 trillion, missing its monthly target of Rs1.368 trillion by Rs138 billion. The shortfall reflects continued challenges in meeting the set revenue targets despite efforts to increase collections.

In August, the FBR also struggled to meet its monthly goal, falling short by Rs64 billion, with total tax collection amounting to Rs886 billion for the month. 

In a related development, the International Monetary Fund (IMF) mission noted that Pakistan’s tax revenues were not significantly impacted by the recent floods. 

The IMF also urged the FBR to share visible results from its ongoing transformation plan, which was approved last year and backed with over Rs55 billion for initiatives aimed at improving tax collection.

Earlier, Prime Minister Shehbaz Sharif had requested the IMF to consider the flood’s impact during review talks. Authorities indicated that contingency funds could be used to cover flood-related expenditures, likely avoiding the need for additional resources.

Pakistan’s internal assessments suggest limited economic disruption, with GDP growth projected to remain between 3.7% and 4%, slightly below the 4.2% target. 

The IMF also raised concerns over the delayed publication of the Governance and Corruption Diagnostic Assessment (GCD) report, which is expected to be released within the week. The report, which identifies weaknesses in Pakistan’s judicial, administrative, and corporate governance, includes several recommendations for strengthening rule of law and judicial integrity.

Meanwhile, to ease compliance and support taxpayers, the FBR extended the deadline for filing income tax returns for the tax year 2025 until October 15. This extension follows persistent requests from business associations and professional bodies, marking a shift from the FBR’s previous stance, which had maintained September 30 as the final date. The extension is expected to reduce last-minute system pressure and help ensure higher compliance.

The ongoing IMF-Pakistan review discussions, which started on September 25, are scheduled to continue until October 8. A successful conclusion of the talks could unlock over $1.2 billion in loan tranches under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF).