Govt Has Given Over Rs. 2.2 Trillion in Tax Exemptions So Far in FY23

The Federal Board of Revenue (FBR) has suffered a massive revenue loss of Rs. 2,239 billion in 2022-23 on account of tax exemptions, reduced rates, special tax rates, and concessions as compared to Rs. 1,757.035 billion during the fiscal year 2021-22, reflecting an increase of Rs. 482 billion.

The Economic Survey 2022-23 released on Thursday disclosed that the revenue loss has occurred due to exemptions granted through the notifications, schedules of federal tax laws and special tax regimes, and concessionary rates on imports like a reduced rate of sales tax on petroleum products caused a revenue loss of  Rs. 632,950 billion during 2022-23.

The survey disclosed that the sales tax exemption on cellular mobile phones caused a revenue loss of Rs. 1,021 million in 2022-23 as compared to Rs. 46 billion during 2021-22.

The Federal Board of Revenue (FBR) has suffered a revenue loss of Rs. 257 billion on account of sales tax exemption on imports during 2022-23 as compared to Rs. 527 billion during 2021-22. The cost of sales tax exemption has been reduced by Rs. 270 billion in 2022-23 which is a big reduction in the cost of exemption during the period under review.

Sales tax exemption on local supplies caused a revenue loss of Rs. 133,178 billion in 2022-23 as compared to Rs. 233.541 billion in 2021-22, reflecting an increase of over Rs. 100 billion.

The cost of income tax exemptions amounted to Rs. 423.9 billion against Rs. 399.662 billion, showing an increase of Rs. 24.238 billion and the cost of customs duty exemptions was Rs. 521.7 billion in 2022-23 against Rs. 342.890 billion in 2021-22, reflecting an increase of Rs. 178.81 billion.

The FBR has suffered a massive revenue loss of Rs. 390 billion in 2022-23 as compared to Rs. 760.543 billion in 2021-22 due to sales tax exemptions available under the Sixth Schedule (Exemption Schedule) of the Sales Tax Act.

The cost of exemptions in respect of customs duty has been calculated at Rs. 521.7 billion in 2022-23 as compared to Rs. 342.890 billion for 2021-22, reflecting an increase of Rs. 178.81 billion.

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