The Federal Board of Revenue (FBR) is weighing a proposal to increase taxes on bank profits in a bid to bridge a projected Rs. 550 billion revenue shortfall for December. The proposed tax hike could generate up to Rs. 100 billion in additional revenue, providing some relief to the government’s fiscal challenges.

Officials revealed that banks may be offered concessions on their advance deposit ratios—whether to the treasury or the private sector—as an incentive to accept the increased tax burden. However, without this measure, meeting the revenue shortfall for December appears unlikely.

The proposal, if approved, could be implemented within days, sources said. The FBR is facing mounting pressure to meet its ambitious target of collecting Rs. 1.4 trillion in December, a goal that now seems unattainable. This comes on top of a Rs. 356 billion revenue deficit recorded during the first five months of the fiscal year (July-November).

Earlier this month, the government announced plans to implement alternative fiscal measures to tax bank profits derived from investments in government securities. A high-level committee was also formed to review the legal framework governing fiscal policies related to the Advance to Deposit Ratio in the banking sector.

If the tax hike is enacted, it will mark another step in the government’s efforts to address the growing fiscal deficit. However, the move is likely to spark debate over its potential impact on the banking sector and the broader economy.