FBR Struggles to Meet IMF Tax Targets for the current fiscal year.

FBR has been witnessing tax shortfalls almost every fiscal year, but this time it is different because recent fiscal year FBR tax shortfalls were not so high as compared to this fiscal year the past 7 months. Leave the shortfall aside; the major issue is that government spending is increasing as well.

A tax shortfall was bound to happen since many economic experts said during the June 2024 budget proposal that this budget wouldn't bring the desired numbers because the numbers were not realistic. The FBR tax shortfall in January alone is reported to be around 80 billion rupees. 

FBR says that the shortfall is occurring due to inflation slowing down, and experts say that the major reason for the tax shortfall is that people's purchasing power has seen a major decline, due to the economic growth last year being reported at 0.92%, which is not even a single digit. Moreover, this is the major reason for the inflation decrease, because people are not buying products as they should, which has caused an economic slowdown.

Total shortfalls during these 7 months are reported to be around 468 billion rupees, and it might be a worrying sign for the finance ministry that it might require to cut spending again to match the target number of taxes agreed with the IMF, or the government will require other measures like a mini budget or increasing taxes in other areas to match the IMF tax target for FY 2025.