FBR’s 2024 report reveals PKR 78 billion annual revenue loss from pension tax exemptions. The top 10 sectors accounted for PKR 459.16 billion, impacting Pakistan’s budget.
The Federal Board of Revenue (FBR) has released its 2024 Tax Expenditure Report, highlighting substantial revenue loss attributed to tax exemptions. The report, dated July 7, sheds light on the financial impacts of these exemptions across various sectors.
A key finding is the significant revenue loss of PKR 78 billion annually due to income tax exemptions granted to pensioners. Furthermore, the top 10 sectors benefiting from these exemptions account for PKR 459.16 billion, representing 96.27% of the total income tax expenditure.
The financial sector stands out with a notable revenue loss of PKR 115 billion due to tax exemptions. Social security exemptions have resulted in a financial impact of PKR 60 billion, while the state apparatus has suffered a revenue loss of PKR 57 billion. Additionally, the energy and mining sector faced a revenue shortfall of PKR 41 billion, and the health and pharmaceutical sector saw exemptions amounting to PKR 14 billion.
These substantial exemptions collectively contribute to significant reductions in national revenue, thereby affecting the overall budget and financial planning of the country. The FBR’s detailed report underscores the need for a critical review of tax policies to ensure a balanced approach toward fiscal sustainability and economic growth.
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