The Federal Board of Revenue (FBR) has reported a revenue shortfall of nearly Rs42 billion during the first two months of the current fiscal year, mainly due to lower domestic sales tax collections and declining revenue from utilities.
According to provisional figures, FBR collected Rs1.657 trillion between July and August FY26, compared to the target of Rs1.699tr. Despite missing the target, this marks a 15 percent increase from Rs1.436tr collected during the same period last year. Officials anticipate that a slight rise in revenue on August 31 may help reduce the overall gap.
The shortfall is largely linked to weaker sales tax performance, as many businesses were shut down amid severe flooding across the country. Revenue from utilities also fell sharply, with collections dropping by Rs39bn in the first two months. Total receipts from utilities stood at Rs86bn, down from Rs125bn recorded in the same period last year. Analysts attribute the decline to frequent power outages and a shift toward solar power, which has reduced taxable consumption of conventional energy sources.
In August alone, the FBR revenue shortfall amounted to Rs54bn, with Rs897bn collected against a monthly target of Rs951bn. Nonetheless, this reflects a 16 percent year-on-year rise from Rs777bn collected in August FY25.
In the previous fiscal year, FBR also struggled[1] to meet its goals. It missed the revised annual revenue target by Rs163bn, collecting Rs11.737tr against the revised goal of Rs11.9tr. Still, this represented a 26.19 percent increase over Rs9.301tr collected in FY24, showing continued year-on-year growth despite falling short of targets.