The Federal Board of Revenue fell short of its revised annual tax collection target by around Rs. 978 billion in fiscal year 2025-26, according to figures compiled by the tax department.

The FBR collected Rs. 13.001 trillion during the fiscal year, missing the revised target of Rs. 13.979 trillion maintained by the International Monetary Fund during the May review talks.

The original annual target had been set at Rs. 14.13 trillion by the IMF and the government in June last year. However, it was later revised downward in light of slower-than-expected revenue growth and prevailing economic conditions.

Despite the downward revision, the FBR was unable to meet the updated goal.

Officials attributed the weak revenue performance to subdued economic activity, lower imports and other macroeconomic factors that affected tax receipts. They said, however, that the FBR continued enforcement and administrative measures during the year to improve compliance and broaden the tax base.

The tax authority also processed refunds worth billions of rupees during the fiscal year, particularly for exporters, in an effort to facilitate the business community.

A detailed breakup of collections showed that income tax remained the largest contributor to overall revenue, followed by sales tax, customs duty and Federal Excise Duty.

The government is expected to set a higher tax collection target for fiscal year 2026-27, with the FBR likely to step up enforcement measures and documentation efforts to narrow the revenue gap.