The International Monetary Fund (IMF) has projected a downward-revised tax collection target of Rs. 13,979 billion for the Federal Board of Revenue (FBR) for 2025-26, compared with the Rs. 14,307 billion revenue target set in the federal budget for the same year.
According to the IMF’s Second Review under the Extended Arrangement under the Extended Fund Facility, one year into the EFF-supported program, efforts by the FBR and provincial governments have raised general government tax revenues to above 12 percent of GDP.
Sustaining this momentum in line with the authorities’ plan to increase the tax-to-GDP ratio to 15 percent would support debt reduction, enable greater investment in human and capital development, and drive economic growth, said the report.
To achieve the revised revenue target, the authorities remain committed to strengthening FBR’s tax collection efforts.
The IMF report noted that the FBR has deployed a range of measures to boost revenue collection, including increasing the number of audits; improving the collection of sales and withholding taxes through wider use of POS terminals and digital invoicing; conducting extensive outreach campaigns to encourage tax filing; and using various tools to physically monitor the production of taxable goods.
To better prioritize these interventions and allocate resources more effectively, the FBR, supported by IMF capacity development, is preparing a comprehensive roadmap with an accelerated timeline for implementing its compliance improvement initiatives. Based on this roadmap, the FBR will complete all actions required to fully implement at least three priority areas, the report added.
