ISLAMABAD: At a time when the IMF mission is visiting Pakistan to complete the third review under the $7 billion Extended Fund Facility (EFF) programme, the Federal Board of Revenue (FBR) is heading towards a substantial revenue shortfall in the outgoing month (February 2026).
The tax collection machinery adopted a policy on the directives of the government that no bank accounts would be attached during the ongoing month, despite receiving a favourable verdict from the country’s top Federal Constitutional Court regarding the Super Tax.
In January 2026, the FBR collected a hefty amount in Super Tax, but in February 2026, the FBR managed to collect Rs 40 billion, falling short of the target of Rs 70 billion for the next instalment of the Super Tax.
Against the desired monthly target of Rs 1.028 trillion for February, the FBR has been struggling to come close to the target. The authorities are now concerned that the tax machinery might face a substantial shortfall in achieving the agreed target with the IMF. If the tax machinery reaches the Rs 950 billion mark by today (Saturday), it should be considered an achievement.
The FBR announced on Friday that in order to facilitate taxpayers, the FBR has directed that all Large Taxpayer Offices (LTOs), Medium Taxpayer Offices (MTOs), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs) shall remain open on Saturday, 28th February 2026. These offices will observe February 28th as a normal working day for the collection of duties and taxes.
The FBR had collected Rs 7,176 billion in the first seven months of the current fiscal year (2026), against the assigned target of Rs 7,521 billion, reflecting a shortfall of Rs 345 billion.
If the shortfall in the first eight months continues to exceed the target during the ongoing review talks with the IMF, the Fund mission will undoubtedly raise the issue with the Pakistani authorities during their discussions, which are set to commence in Islamabad on Monday.
The Ministry of Finance will have no option but to request the IMF to further reduce the FBR’s revenue collection target or cut its expenditures to keep the fiscal deficit, especially the primary balance target, intact for the current fiscal year. The IMF has already lowered the FBR’s tax collection target from Rs 14,130 billion to Rs 13,979 billion, and any further reduction may lead to an even lower target. It is not yet clear whether the IMF will agree to a further downward revision or force the government to reduce its expenditure for the current fiscal year.
On the expenditure front, the ultimate victim is the development budget, as the Public Sector Development Programme (PSDP) is typically slashed to meet the agreed fiscal targets with the IMF.
