FBR misses August target by Rs29bn

ISLAMABAD: The Federal Board of Revenue (FBR) managed to collect Rs901 billion in August, falling short of its projected target of Rs930 billion by Rs29 billion. The collection remained unchanged compared to the Rs900 billion gathered in August 2025. However, in the first two months of 2026-27 (July-August), the FBR raised Rs1.722 trillion, surpassing the target of Rs1.710 trillion by Rs12 billion.

This achievement was largely due to higher-than-anticipated sales tax and federal excise duty (FED) collections. Despite this, income tax and customs duty collections fell short of their targets. The collection saw a modest 4% growth compared to Rs1.656 trillion in the first two months of the previous fiscal year (2MFY26). The FBR issued Rs155 billion in refunds and rebates to taxpayers during this period, up from Rs124 billion a year earlier, representing an increase of Rs31 billion.

Income tax collection reached Rs688 billion in 2MFY27, short of the target of Rs758 billion by Rs70 billion and declining by 3% from Rs710 billion collected a year ago. Sales tax collection totaled Rs718 billion, exceeding the target of Rs633 billion by Rs85 billion, a 14% increase from last year's Rs632 billion. Higher inflation is boosting domestic sales tax revenues, especially due to surging petroleum product prices.

The increased fuel costs raise the petroleum development levy (PDL) and the prices of other goods, leading to additional sales tax collections. Customs duty collection stood at Rs198 billion, falling short of the target of Rs201 billion by Rs3 billion, remaining stagnant at Rs198 billion in 2MFY26. Federal excise duty collection reached Rs118 billion, exceeding the target of Rs117 billion and increasing by 2% from Rs115 billion collected last year.

Higher-than-expected receipts from the PDL helped offset the shortfall in revenue collection. The government is leveraging PDL receipts, driven by high levy rates, to cover the revenue shortfall.