Govt Grants Rs 5.8 Trillion Tax Exemptions Despite FBR Revenue Shortfall

Despite missing tax collection targets, the federal government granted tax exemptions worth Rs. 5.84 trillion in the current fiscal year, as revealed in the Economic Survey 2025. The largest relief—over Rs. 4.25 trillion—came from sales tax exemptions, including Rs. 87.95 billion on mobile phone sales. Income tax relief totaled over Rs. 800 billion, while customs duty exemptions crossed Rs. 785 billion. Key beneficiaries included the export sector, which saved Rs. 178 billion, the auto industry, and CPEC-linked projects with Rs. 133 billion in relief. Additionally, Rs. 61 billion in tax benefits were extended to FATA and PATA regions. While aimed at supporting industries and regions, these exemptions raise concerns about fiscal discipline, especially as Pakistan faces IMF conditions and revenue challenges.

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