- Revenue tax break on oil products contributes to the increase in costs.
- Exceptions make up Income losses of RS1,496,124 million In FY25.
- FBR LED LED remarkable loss of income on RS985,594 billion in 2024-25.
Islamabad: Apart from the unanswered growth target, Pakistan Economic Survey 2024-25, revealed by the government, revealed that Pakistan’s total tax exemption and concessions distributed to various sectors in the economy have risen to RS5.85 trillion in the financial year 2024-25, The news Reported Tuesday.
To reveal the investigation report, although Finance Minister Muhammad Aurangzeb said the number of individual tax files had doubled, he did not answer the question of increasing the cost of tax exemptions despite claims that they were abolished consistently in the last few years.
It is relevant to note that the total cost of tax exemptions has risen to RS5.84 trillion in 2024-25 against RS3.87 trillion in 2023-24, reflecting an increase of RS1.96 trillion. The cost of tax exemptions witnessed an increase of 50% over 2024-25 compared to tax expenses in 2023-24.
The exception of the turnover tax for oil products, customs changes in imports, reduced rates for revenue tax and the total exemptions for revenue tax for imports and local supplies were important contributors to the increased costs of exemptions in 2024-25. However, the economic study did not incorporate the exemption costs delivered to FATA/PATA areas.
The single largest contributor to the increase in exemptions of turnover tax was the exception to VAT on petroleum products through statutory regulatory orders (SROs), which shows a massive loss of income of RS1.496,124 million by 2024-25. Exception of the turnover tax for the import of oil products caused a loss of income of RS299,640 million during this period.
The fixed VAT taxpayer on mobile mobile phones caused a loss of income of RS87,950 million by 2024-25 compared to RS33,057 million by 2023-24, showing an increase of RS54,893 million.
The Federal Board of Revenue (FBR) suffered a loss of income of RS372 billion due to exemption from revenue tax on imports over 2024-25 compared to RS214 billion over 2023-24, reflecting an increase of RS158 billion.
Exception of revenue tax on local supplies caused a loss of income of RS613 billion in 2024-25 compared to RS461 billion in 2023-24, reflecting an increase of over RS152 billion. The cost of exemptions for income tax amounted to 800.8 billion against RS476.9 billion, showing an increase of RS323.9 billion and the cost of duty dependence was RS785.8 billion.
The financial investigation does not mention income loss due to exempt business revenue assigned to independent power producers (IPPS). Similarly, the study does not mention any loss of income from capital gains. The accumulated loss of income due to tax credits accounted for RS101 billion in 2024-25 against RS24,374 billion in 2023-24, showing an increase of RS76,627 billion.
The exception of the income tax from special provisions in the Income Tax Regulation has caused a loss of income of RS52 billion in 2024-25 compared to RS62,756 billion over the course of 2023-24. The exception of the income tax from the total income has a revenue impact of RS443,445 billion in the period considered.
The exception of the income tax, which was available for deductible quotas, caused a loss of income of RS16.4 billion in 2024-25 against RS5,912 billion in 2023-24, showing an increase of RS10,488 billion.
The reduction in income tax rates has revenue consequences of RS45 billion over 2024-25 compared to RS25,492 billion in 2023-24, showing an increase of RS19,508 billion.
FBR has suffered a massive loss of income of RS985,594 billion in 2024-25 compared to RS675 billion in 2023-24 due to exemptions for revenue tax available under the sixth schedule (exemption plan) for the VAT Tax Act. The loss due to exemption from revenue tax (import and domestic phase) has been increased by almost RS985 billion.
The total loss of revenue from the zero classification facility, awarded to various sectors under the fifth form in the VAT Tax Act, 1990, accounted for RS683,429 billion in the considered period against RS206,053 billion in 2023-24, reflecting an increase of RS4777777777777777777777777777777777777776 billion.
FBR has not specified any loss of income for the exceptions within the federal excise regime, which reflects that no loss occurred on this account. The cost of exemptions for income tax was RS800.8 billion in 2024-25 against RS476,960 billion in 2023-24, reflecting an increase of RS323.84 billion.
The cost of exceptions to customs duties is intended for RS785.9 billion in 2024-25 compared to RS543,521 billion in 2023-24, reflecting an increase of RS242,379 billion.
FBR has suffered loss of revenue of RS61 billion in 2024-25 against RS44,107 billion in 2023-24 due to customs dreams and exceptions available under free trade agreements (FTAs) and the preferred trade agreements (PTAs). The loss of income has increased by RS17 billion.
The exception of the duty of duty on the goods from the car sector, investigative and production companies (E&P), general concessions and CPEC caused a loss of RS13336 billion.
