The Federal Board of Revenue (FBR) is considering shifting to a fiscal-year-based performance evaluation system for its field formations, moving away from monthly revenue collection targets, informed sources told Dawn.
The proposal is part of a broader restructuring of tax administration following changes introduced through the Finance Act 2026-27, which aims to reduce human interaction and introduce centralised, technology-driven assessment and audit functions from Islamabad, with field offices focusing primarily on revenue collection.
Officials argue that monthly targets distort performance assessments because revenue flows are affected by factors such as refunds, import cycles, advance tax payments and court decisions many of which fall outside the control of field officers.
The proposal follows a wider redistribution of responsibilities within the federal government. Tax policy formulation has been transferred to the Tax Policy Office in the Ministry of Finance, while tariff policy now falls under the Tariff Policy Board in the Ministry of Commerce, leaving enforcement and revenue collection as the principal functions of FBR.
To support the shift, the FBR has drawn on international benchmarks. One example cited is the Central Board of Direct Taxes in India, which operates on an annual collection cycle, with monthly and fortnightly figures used only for internal monitoring.
The FBR also referenced the International Survey on Revenue Administration covering 58 economies by OECD that account for roughly 90 percent of global GDP which evaluates tax administrations on indicators such as cost of collection, filing rates, tax arrears and dispute resolution, with no indicator measuring monthly target achievement.
Officials note that annual revenue targets approved by parliament are driven by the fiscal needs of the government and are frequently revised during the fiscal year following IMF consultations, making them aspirational benchmarks rather than precise collection estimates.
Despite missing headline targets in recent years, the FBR collected Rs11.74 trillion in FY25, up 26.3 percent from Rs9.29tr the previous year. The tax-to-GDP ratio rose from approximately 8.9 to 10.6 percent, while the number of filers increased from 4.5 million to over 7.2 million in a single year.
The government has set a revenue target of Rs15.26tr for FY2026-27. Under the proposed framework, tax officers would be assessed on broader indicators including tax effort, compliance levels and annual revenue growth rather than monthly collection figures.
