The Federal Board of Revenue (FBR) has published the Tax Expenditure Report 2025, a comprehensive document that assesses the annual cost of tax exemptions across Pakistan. In a notable step toward transparency, the report reveals that data from more than 80 organizations and institutions was incorporated to provide an accurate and holistic picture of the country’s tax expenditure framework.
According to the report, the primary source of data for calculating tax expenditures related to Sales Tax and Customs Duty came from FBR’s official database, the Pakistan Revenue Automation Limited (PRAL). However, the report acknowledges certain limitations in the availability of income tax return data within the FBR system, making it insufficient for calculating accurate estimates of income tax expenditures. To fill these gaps, additional datasets were requested from FBR field formations, while third-party organizations were also engaged to ensure accuracy and completeness.
The report states that collaboration was key to the process, as stakeholders ranging from federal and provincial government entities to private sector institutions contributed data. The Boards of Revenue from all four provinces—Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan—along with their respective Accountant Generals, played a significant role in providing taxpayer information and financial records.
Among the federal institutions, the State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP), Controller General of Accounts, Finance Division, Economic Affairs Division, and Board of Investment were highlighted as key contributors. Entities such as the Employees’ Old-Age Benefits Institution, Export Processing Zones Authority, Oil & Gas Development Company Limited (OGDCL), and Oil & Gas Regulatory Authority (OGRA) also provided critical insights.
The Tax Expenditure Report 2025 further notes that specialized organizations like the Pakistan Software Export Board (PSEB), Pakistan Telecommunication Authority (PTA), Pakistan Agricultural Research Council, and the Pakistan National Shipping Corporation were among those whose data was incorporated. Other major contributors included Pakistan Railways, Water and Power Development Authority (WAPDA), National Logistic Cell, and the National Transmission & Dispatch Company (NTDC).
In addition to government and state-owned entities, private institutions such as commercial banks, asset management companies, real estate investment trusts, insurance providers, and pension funds also shared information. Notably, the Pakistan Stock Exchange (PSX), Pakistan Mortgage Refinance Company Limited, and mutual fund institutions provided market-based data essential for assessing exemptions in capital markets and financial services.
International and development-linked organizations also played a role, with data contributions from China Overseas Ports Holding Company (Pakistan) Pvt. Ltd., Gwadar Free Zone Company, Aga Khan Development Network, and the Association of Builders and Developers (ABAD). Industry associations like Pakistan Software Houses Association for IT & ITES (P@SHA), Women Chambers of Commerce and Industry, and Pakistan Film Producers Association further broadened the scope of information included in the analysis.
The comprehensive approach underscores the government’s intention to capture the true fiscal impact of exemptions, rebates, and preferential treatments across sectors. The inclusion of such a wide range of stakeholders ensures that the report goes beyond traditional tax collection figures, incorporating social, industrial, and developmental perspectives into the overall assessment.
By engaging such diverse data sources, the Tax Expenditure Report 2025 aims to provide policymakers with a stronger foundation for decisions related to fiscal reforms, subsidy rationalization, and revenue mobilization strategies. Experts believe that this expanded methodology will help the government identify areas where exemptions can be streamlined without undermining economic growth or social welfare objectives.
The report is expected to be a critical tool for ongoing debates around taxation policy, particularly at a time when Pakistan faces significant fiscal challenges and the need to balance revenue generation with economic stability.
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