FBR misses August target by Rs29bn
ISLAMABAD: The Federal Board of Revenue (FBR) collected Rs901 billion in August, missing the projected target of Rs930bn by Rs29bn.
The collection remained stagnant compared to Rs900bn in August 2025. However, the FBR raised Rs1.722 trillion in the first two months (July-August) of 2026-27, exceeding the target of Rs1.710tr by Rs12bn.
The target for the first two months of FY27 was achieved largely because of higher-than-anticipated collection of sales tax and federal excise duty (FED). However, the collection target of income tax and customs duty was missed.
The collection posted a paltry growth of 4pc compared to Rs1.656tr in 2MFY26.
Issues Rs155bn in refunds, rebates to taxpayers in 2MFY27
In FY26, the FBR had collected over Rs13tr, exceeding the downward revised target of Rs12.983tr by over Rs21bn. Sales tax and FED collection exceeded the target, while income tax and customs duty fell short of their respective targets.
The government has projected an annual revenue collection target of Rs15.264tr for FY27.
Refunds, rebates
The FBR issued Rs155bn in refunds and rebates to taxpayers during July-August FY27, up from Rs124bn a year earlier, representing an increase of Rs31bn.
Income tax collection reached Rs688bn in 2MFY27, falling short of the target of Rs758bn by Rs70bn. It also declined by 3pc from Rs710bn collected in the corresponding months last year.
Sales tax collection totalled Rs718bn, exceeding the target of Rs633bn by Rs85bn. However, it increased by 14pc from Rs632bn last year.
Higher inflation is boosting domestic sales tax revenues, particularly due to surging petroleum product prices. As fuel costs rise, not only does the petroleum development levy (PDL) increase, but the knock-on effect also drives up the prices of other goods, generating additional sales tax collections.
In the first two months of the current fiscal year, sales tax receipts recorded a 14pc growth — a clear reflection of inflation running higher than anticipated across the country.
Customs duty collection stood at Rs198bn, against the target of Rs201bn, resulting in a decline of Rs3bn. It remained stagnant at Rs198bn collection in 2MFY26. Federal excise duty collection reached Rs118bn, exceeding the target of Rs117bn. It increased by 2pc from Rs115bn collected last year.
Higher-than-expected receipts from the PDL also helped the government offset the shortfall in revenue collection. The government is using PDL to offset the shortfall recorded in revenue collection.
The record PDL receipts were largely driven by historically high levy rates, with the government charging up to Rs120 per litre on petrol.
Unlike general sales tax on petroleum products, which is collected by the FBR and shared with the provinces under the National Finance Commission award, PDL receipts accrue entirely to the federal government. Petroleum products currently carry no GST.
Published in Dawn, September 1st, 2026
