FBR starts FY strong, meets first month target with PKR 755 bn revenue

Islamabad: The Federal Board of Revenue (FBR) has kicked off the new fiscal year on a positive note by collecting PKR 755 billion in July, slightly exceeding its monthly target of PKR 748 billion. This marks a 15% increase compared to the same month last year.

While this performance is encouraging, it still falls short of the 20% year-on-year growth required to meet the full-year revenue target of PKR 14.13 trillion set for FY2024–25.

The growth in July was largely driven by indirect taxes, particularly sales tax and customs duties. Sales tax collections reached PKR 302 billion, surpassing the target by PKR 12 billion, while customs duties brought in PKR 106 billion, exceeding expectations by PKR 14 billion. The customs boost was attributed to the clearance of cargoes previously delayed by importers anticipating tariff reductions.

Read: FBR issues new deadline for June sales tax and excise returns

However, income tax collections fell PKR 15 billion short of the monthly target, despite showing a 5.6% improvement over the same period last year. Officials cited large advance payments made in June to meet revised targets as a reason for the shortfall.

Federal excise duty collections also lagged behind expectations.

Meanwhile, the FBR faces challenges on the policy front, particularly regarding controversial new powers granted to tax officials—such as arresting individuals suspected of sales tax fraud and treating large cash expenditures as taxable income. These measures have drawn criticism from the business community, prompting the government to form a committee to review and resolve concerns.

Leadership at the FBR also remains in flux. Chairman Rashid Langrial has been on medical leave, with Dr. Hamid Ateeq Sarwar, recently retired, temporarily overseeing operations on a contractual basis.

As the government pursues import liberalization and tariff reductions, revenue collections may see further changes in the coming months.