- The relief of the sales tax on petroleum products helps increase costs.
- Exemptions are at Loss of income from RS1,496,124m during fiscal year 25.
- The FBR underwent a significant loss of income of 985.594 billion rupees in 2024-25.
Islamabad: In addition to the failed growth objective, Pakistan Economic Survey 2024-25 revealed by the Government revealed that the total tax exemption from Pakistan and the concessions built in various sectors of the economy increased to 5.85 billion rupees during the year 2024-25, The news reported Tuesday.
Restracting the investigation report, although the Minister of Finance Muhammad Aurangzeb said that the number of individual declarants had doubled, he did not answer the question of the increase in the cost of tax exemptions despite the affirmations that they were abolished in a coherent manner in recent years.
It is relevant to note that the overall cost of tax exemptions increased to 5.84 billions of rupees in 2024-25 compared to 3.87 Billions of rupees in 2023-24, reflecting an increase in RS1.96 Billions. The cost of tax exemptions experienced a sharp increase of 50% in 2024-25 compared to tax expenditure in 2023-24.
The exemption from the sales tax to petroleum products, the tax concessions on imports, reduced sales tax rates and overall exemption from the sales tax on imports and local supplies were major contributors to the increase in the cost of exemptions in 2024-25. However, the economic survey did not incorporate the cost of exemption provided to the Fata / Pata areas.
The single contributor to the sharp increase in exemptions from the sales tax was the exemption from the sales tax on petroleum products through statutory regulatory orders (SRO), showing a loss of massive income from RS1,496 124 million in 2024-25. The exemption from sales tax on the import of petroleum products led to a loss of income from RS299,640 million during this period.
The fixed sales tax regime on cell cell phones caused a loss of income of 87,950 million rupees in 2024-25, against 33,057 million rupees in 2023-24, showing an increase in RS54 893 million.
The Federal Board of Return (FBR) underwent a loss of income of 372 billion rupees due to the exemption from the import tax in 2024-25, against 24 billion rupees in 2023-24, reflecting an increase in RS158 billion.
The exemption from sales tax on local supplies led to a loss of income of 613 billion rupees in 2024-25, against 461 billion rupees in 2023-24, reflecting an increase of more than 152 billion rupees. The cost of income tax exemptions amounted to 800.8 billion rupees against 476.9 billion rupees, which indicates an increase of RS323.9 billion and the cost of customs duties exemptions was 785.8 billion rupees in 2024-25 against RS543.5 billion in 2023-24 of RS242.3 billion.
The economic survey does not mention the loss of income due to the income of exempt companies granted to independent electricity producers (PPI). Likewise, the survey does not mention any loss of income for capital gains. The loss of accumulative income due to tax credits amounted to 101 billion rupees in 2024-25 against RS24,374 billion in 2023-24, which shows an increase of RS76,627 billion.
The income tax exemption from the special provisions of the income tax order led to a loss of income of 52 billion rupees in 2024-25, against 62.756 billion rupees in 2023-24. Exemption from total income income tax has an impact on income from RS443,445 billion during the period.
The exemption from income tax at the disposal of deductive allowances led to a loss of income for RS16.4 billion in 2024-25 against 5.912 billion rupees in 2023-24, which shows an increase of 10.488 billion rupees.
The reduction in income tax rates has implications on income of 45 billion rupees in 2024-25, against 25.492 billion rupees in 2023-24, showing an increase of RS1908 billion.
The FBR underwent a massive loss of income of 985.594 billion rupees in 2024-25, against 675 billion rupees in 2023-24 due to the exemptions from sales tax available under the sixth appendix (exemption calendar) of the sales tax law. The loss due to the exemption from the sales tax (importance and inner step) has been increased by almost 985 billion rupees.
The total loss of revenue of the zero rating installation granted to various sectors under the fifth appendix of the 1990 sales tax law amounted to 683.429 billion rupees during the revised period against RS206.053 billion in 2023-24, reflecting an increase in RS477.376 billion.
The FBR has not specified any loss of income for exemptions in the federal excise diet, reflecting that no loss has occurred on this account. The cost of income tax exemptions was 800.8 billion rupees in 2024-25 against 476.960 billion rupees in 2023-24, reflecting an increase of RS323.84 billion.
The cost of customs duties was calculated at 785.9 billion rupees in 2024-25, against 543.521 billion rupees in 2023-24, reflecting an increase of RS242,379 billion.
The FBR underwent a loss of income of 61 billion rupees in 2024-25 against 44.10 billion rupees in 2023-24 due to the tariff concessions and the exemptions available under the free trade agreements (ALF) and preferential trade agreements (PTA). The loss of income increased by 17 billion rupees.
The exemption of customs duties on articles by the automotive sector, exploration and production companies (E&P), general concessions and CPECs caused a loss of RS133.236 billion in 2024-25 against RS146.598 billion in 2023-24, showing a reduction of RS146.362 billion.
