In a move designed to ease the financial burden on vital sectors and promote economic growth, the Federal Board of Revenue (FBR) has extended approximately Rs 60 billion in tax relief on imports during the current fiscal year. The reduced tax rates were applied under Clause 56 of Part IV of the Second Schedule of the Income Tax Ordinance, 2001, according to the FBR’s latest tax expenditure report.
This relief, provided in the form of reduced income tax rates on imports, is part of a broader strategy to support industries that are central to Pakistan’s economic development. By lowering the tax burden on key imports, the FBR aims to improve the cost efficiency of essential sectors, encourage production, and sustain vital supply chains that contribute to exports, energy security, and infrastructure development.
The FBR clarified that the reduced withholding tax rate, usually charged under Section 148 of the Income Tax Ordinance, is being offered selectively to specific entities and categories of goods. These include imports that are critical for industries such as oil and gas, manufacturing, agriculture, public infrastructure, and export-oriented businesses. The relief is also extended to government bodies and international companies with significant foreign government stakes, reflecting a strategic approach to facilitate both domestic and international economic cooperation.
According to the report, a substantial portion of this relief supports the petroleum sector, with exemptions granted on imports of crude oil, diesel, motor spirit, and other fuels by major oil marketing companies and refineries licensed by the Oil and Gas Regulatory Authority (OGRA). This ensures that fluctuations in global oil prices do not translate into prohibitive costs for the local economy.
The tax relief also benefits businesses operating under specific trade and manufacturing schemes, including those that fall under the Manufacturing Bond Scheme or are importing temporarily exempt goods. These schemes are designed to help exporters and industrial units lower input costs, thereby enhancing their global competitiveness. Additionally, exemptions have been extended to the import of machinery used in government-led infrastructure projects, which is expected to aid in the timely completion of development initiatives across the country.
The FBR emphasized that these measures are part of a targeted effort to stabilize key sectors while maintaining a balance between revenue collection and economic growth. The tax incentives are expected to encourage increased industrial activity, support job creation, and attract both local and foreign investment, particularly in sectors where cost pressures could otherwise deter growth.
In an environment where economic recovery is becoming more evident and the government is seeking to consolidate gains, the continuation of import-related tax relief serves as a signal of policy continuity. It underscores the government’s commitment to maintaining a supportive regulatory environment, one that aligns fiscal objectives with the broader goals of industrial expansion, export promotion, and economic resilience.
As global trade patterns shift and domestic demand evolves, the FBR’s approach to tax policy is likely to remain a critical factor in sustaining momentum in key sectors. The latest extension of tax relief further cements the role of targeted fiscal support in shaping Pakistan’s path toward sustainable economic development.