ISLAMABAD: Pakistan granted tax exemptions and concessions worth Rs11.047 trillion over five fiscal years, from 2020-21 to 2024-25. The Ministry of Finance presented this shocking details in the National Assembly.
The disclosure has raised questions about the beneficiaries of these concessions and their impact on public revenue.
According to the ministry, tax exemptions totalled Rs1.482 trillion in 2020-21 before rising to Rs2.239 trillion in 2021-22. The amount increased further to Rs2.540 trillion in 2022-23, then declined to Rs2.434 trillion in 2023-24 and Rs2.352 trillion in 2024-25. These figures highlight the substantial revenue the government forwent through tax concessions during the period.
During parliamentary proceedings, Jamiat Ulema-e-Islam lawmaker Alia Kamran questioned whether ordinary citizens had benefited from the exemptions. She also asked the government to clarify whether 2027 would mark Pakistan’s final year of borrowing from the International Monetary Fund (IMF).
In response, a parliamentary secretary said he could not provide a definitive assurance but expressed hope that Pakistan would no longer need IMF borrowing after 2027.
Meanwhile, the government is reportedly considering a mini-budget to introduce tax measures linked to its proposed automotive policy.
Under the reported plan, electric vehicles could receive sales tax relief worth Rs85 billion. However, the government may introduce alternative levies to compensate for the resulting revenue shortfall. Proposed measures include an Automotive Development Levy, a Federal Excise Duty on certain vehicles and a carbon levy on petrol and conventional vehicles.
The developments highlight the government’s challenge of balancing tax revenue requirements with incentives for selected sectors. Lawmakers continue to seek greater transparency about who receives tax concessions and whether these measures deliver meaningful economic benefits to the public.
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