The FBR’s performance has deteriorated despite distributing 1,000 cars and increasing salaries by up to 400% to incentivise officers to perform better. Photo: AFP
ISLAMABAD:
As the tax shortfall against the downward revised target widened to Rs374 billion, the central bank on Friday ordered commercial banks to remain open on a holiday in the hope of collecting a few billion rupees more to minimise the yawning gap.
The Federal Board of Revenue (FBR) collected Rs7.15 trillion till the last working day of the month, falling short of the July-January target by a margin of Rs374 billion, according to provisional results compiled till Friday evening. Compared to the same period last year, the collection was nearly 12% or Rs743 billion higher till the last working day.
The FBR expects that the collection would improve by Rs50 billion on Saturday after more companies deposit money on account of super tax arrears.
However, against the original target, the shortfall was as high as Rs597 billion for the July-January period of the current fiscal year, according to the provisional figures. The International Monetary Fund (IMF) had downward adjusted the target due to the slowing economy and a low rate of inflation.
Due to the widening gap, despite recovering some arrears of the super tax after the Federal Constitutional Court judgment in favour of the FBR, the State Bank of Pakistan (SBP) on Friday issued instructions to banks to remain open on Saturday (today).
“To facilitate taxpayers in making over-the-counter (OTC) payments of government duties and taxes, it has been decided, on the request of the Federal Board of Revenue (FBR), that Saturday opening branches of all commercial banks (including NBP branches handling customs collection) shall observe extended working hours from 9am to 5pm,” according to a statement issued by the central bank.
In a functional tax and governance system, banks are not forced to keep their branches open to compensate for the FBR’s failures.
The central bank further stated that banks have been advised to keep their concerned branches open on January 31, 2026, for as long as required to facilitate the Special Clearing for Government transactions conducted by NIFT. Banks shall also ensure uninterrupted availability of their online payment channels, including internet banking, mobile applications, ATMs and other digital platforms, to facilitate the online payment of government duties and taxes, it added.
Prime Minister Shehbaz Sharif is heavily invested in improving the affairs of the FBR but, so far, he has not been able to achieve the desired results.
The Constitutional Court this week ruled in favour of the government in the super tax case, allowing the FBR to recover an estimated Rs190 billion from taxpayers. FBR officials said they have managed to recover at least Rs50 billion on account of super tax, while further recoveries were expected next month.
However, Dr Ikramul Haq, a renowned tax and legal expert, wrote that “the short order of the Federal Constitutional Court, validating super tax under sections 4B and 4C of the Income Tax Ordinance, has unsettled established constitutional jurisprudence governing the limits of parliamentary power to impose ‘taxes on income’.” He stated that the judgment’s paragraph alone collapses under the weight of its own internal contradiction. One cannot, in constitutional logic, exhaust a legislative entry and yet continue to derive further taxing power from the very same entry by merely altering nomenclature, he added.
The FBR’s performance has deteriorated despite distributing 1,000 cars and increasing salaries by up to 400% to incentivise officers to perform better.
The details showed that, against the revised target of Rs3.64 trillion, the FBR collected Rs3.5 trillion in income tax, falling short of the goal by Rs162 billion, though it was 12.5% higher than last year. Sales tax collection amounted to Rs2.44 trillion, falling short of the target by Rs207 billion, but was 11% higher than last year.
Federal excise duty collection remained at Rs462 billion, slightly higher than the revised target, and was also 18% more than the previous fiscal year’s collection. Customs duty collection fell short of the target by Rs30 billion and stood at Rs750 billion.
The FBR paid Rs339 billion in refunds, which were Rs25 billion higher than the previous fiscal year.
Against the monthly target of Rs1.03 trillion, the FBR collected Rs986 billion in January. However, the FBR expects that the collection would cross Rs1 trillion by Saturday evening as it continues to push companies to pay arrears of the super tax.
