Economic Survey 2023-24: Pakistan loses a record Rs3.9tr to tax exemptions

Cash-strapped Pakistan witnessed the highest-ever single-year increase in tax exemptions or concessions, surging by 73.24 per cent or Rs1.64 trillion in the outgoing fiscal year. The Pakistan Economic Survey 2023-24, released by Finance Minister Muhammad Aurangzeb on Tuesday, showed that the Federal Board of Revenue (FBR) doled out a record Rs3.879tr in FY24 compared to Rs2.239tr in FY23. The cost of tax exemptions has climbed for the sixth consecutive year despite the government’s claim that exemptions will gradually decrease. The significant rise in tax exemption costs is mainly due to the Rs1.338tr waiver on domestically supplied and imported petroleum, oil, and lubricant (POL) products. It’s important to note that this isn’t an exemption as the federal government has already collected the maximum amount through the petroleum development levy (PDL).