Islamabad, January 30, 2025 – The Federal Board of Revenue (FBR) has made impressive strides in revenue generation, collecting 42.56% of its annual tax target during the first six months of the fiscal year 2024-25. The performance marks a significant improvement in the country’s tax collection efforts, reflecting the FBR’s ongoing initiatives to enhance tax compliance and broaden the tax base.
According to the latest figures released by the Ministry of Finance, the FBR collected a total of Rs 5.625 trillion in tax revenue between July and December 2024. This represents a notable 25.9% increase compared to the Rs 4.469 trillion collected during the same period in the previous fiscal year. The substantial growth in revenue demonstrates the FBR’s success in implementing tax reforms and driving greater efficiency in tax collection processes.
For the current fiscal year, the FBR has set an ambitious target of Rs 12.913 trillion in tax revenue. This goal is 38.9% higher than the total tax revenue of Rs 9.311 trillion collected in the previous year. Despite the challenges posed by global economic conditions, the government and the FBR are optimistic about reaching this target, driven by positive economic indicators such as increasing industrial production and a rise in imports, both of which contribute to higher tax revenues.
However, the FBR is not without its challenges. One of the key concerns moving forward is the easing of inflation. While higher inflation historically contributed to increased tax revenue, particularly in consumption-based taxes such as sales tax and excise duties, the decline in inflationary pressures could slow the growth of indirect tax collections. This is a critical factor that the FBR will need to navigate carefully to maintain its revenue trajectory.
Another challenge for the FBR is the recent shift in monetary policy by the State Bank of Pakistan (SBP). The central bank’s decision to sharply reduce interest rates is expected to have an impact on tax revenue from profit on debt. With a decrease in interest income, the FBR may face a shortfall in revenue from this sector, potentially affecting overall tax collection. In light of these challenges, the FBR is likely to explore alternative measures to offset the shortfall and ensure that the tax target is met.
Looking ahead, the FBR plans to ramp up efforts to strengthen tax administration, curb tax evasion, and encourage voluntary tax compliance among citizens and businesses. In addition to tightening enforcement measures, the FBR is focused on expanding its digital tax systems to make tax payment and filing more accessible and efficient for taxpayers. These efforts, combined with the continued stability of the country’s economy, are expected to play a key role in achieving the FBR’s revenue target for the remainder of FY25.
In conclusion, the FBR’s performance in the first half of the fiscal year reflects the government’s commitment to improving tax collection and addressing the challenges that lie ahead. With a strategic approach, ongoing economic growth, and enhanced tax administration, the FBR is confident that it will be able to meet its ambitious target and contribute to the financial stability of the country.