Pakistan’s tax collection outlook has come under fresh pressure as early market closures triggered by economic pressure and energy disruptions are expected to cause Rs. 15-20 billion in revenue losses, officials informed the National Assembly Standing Committee on Finance this week.
The briefing revealed that shortened business hours, rising fuel prices, and power supply disruptions are already slowing commercial activity across major cities, directly affecting tax generation at a time when the Federal Board of Revenue (FBR) is struggling to meet its targets.
Committee members were informed that petroleum prices have risen by nearly 42 percent in recent months. The cost shock has reduced consumer spending power, slowed retail turnover, and weakened overall economic activity, all of which directly impact FBR revenues.
Authorities briefed the committee that surging global oil prices have sharply increased transportation costs, electricity expenses, and operating costs for traders and industries. As businesses close earlier to manage higher expenses and energy shortages, lower sales volumes are leading to weaker income tax collections.
The situation is further complicated by disruptions in RLNG and furnace oil supplies, which have increased the risk of load shedding in Islamabad and other big cities.
Power shortages and reduced market timings are limiting trading hours, shrinking taxable transactions and widening the gap between projected and actual tax receipts.
Lawmakers questioned FBR officials over repeated revenue shortfalls as tax collection remains weak despite new taxation measures and increased economic pressure on businesses and consumers. Committee Chairman Syed Naveed Qamar said that inadequate tax enforcement continues to force the government to rely heavily on borrowing.
Finance Ministry officials acknowledged that inflation and economic uncertainty are creating a challenging environment for revenue collection. Higher import costs, slowing business activity, and declining purchasing power are expected to weigh further on tax inflows.
Members recommended stricter oversight of FBR performance and called for structural reforms to expand the tax base, improve enforcement, and reduce reliance on indirect taxation that disproportionately burdens almost everyone in the country.