FBR Strategies for Revenue Shortfall
The Federal Board of Revenue (FBR) recently presented its projections for the fiscal year 2024-25 during a briefing with the International Monetary Fund (IMF). As the FBR anticipates a shortfall of Rs230 billion in the second quarter (October-December), the board has developed and presented a set of targeted measures aimed at “bridging this revenue gap”. These initiatives focus on enhancing tax enforcement, broadening the tax base, and revising policies for retailer registration.
During an unplanned official visit from the International Monetary Fund (IMF), Pakistani authorities reaffirmed their commitment to the budgeted revenue targets on Monday. They also vowed to address first-quarter shortfalls through stringent enforcement and administrative measures.
Sources informed Dawn that the IMF delegation, led by mission chief Nathan Porter, began discussions on the current revenue situation with the Pakistani team, headed by Minister of State for Revenue Ali Pervez Malik and Federal Board of Revenue (FBR) chairman Rashid Mehmood Langrial.
The IMF mission will remain in Pakistan until November 15 to discuss recent developments and program performance to date, according to sources. They clarified that this mission is not part of the first review under the Extended Fund Facility (EFF), which they scheduled for no earlier than the first quarter of 2025.
Short-Term and Long-Term
To meet collection goals and counteract recent declines in expected revenue, the FBR has developed both “short-term and long-term strategies.” These measures include a revised approach to taxing retailers, particularly identifying high-net-worth individuals and increasing federal excise duties (FED) on specific products.
Revised Retailer Policies
The board has decided to end the practice of fixed tax collection for shops and retailers and will instead use data analysis to register large retailers. Rather than conducting physical surveys, the FBR will base tax registration on verifiable data, such as commercial electricity usage, to bring more retailers into the tax system.
Contingency Measures Under FBR Strategies for Revenue Shortfall
As a contingency, if revenue collections fall below expectations, the “FBR strategies for revenue shortfall” include adjustments such as raising withholding taxes on imports and services to generate additional monthly revenue of Rs10.8 billion. These measures are projected to help counteract the recent shortfall while sustaining economic growth.
