Fertilizer Industry Received Tax Exemptions Worth Rs. 252.6 Billion in FY23

The fertilizer sector benefited greatly from sales tax exemptions worth Rs. 252.60 billion in the fiscal year 2022-23, according to the latest Tax Expenditure Report (2024) issued by the Federal Board of Revenue (FBR).

During the same period, the agricultural sector expanded by 28.1 percent while the monetary value of agricultural production was recorded at Rs. 19.079 trillion. However, this growth also led to increased input costs.

Local production of fertilizers enjoyed Rs. 232.6 billion in sales tax exemptions during the period in review. The fertilizer sector collectively benefited from a total concession of Rs. 252.60 billion under the Sixth Schedule of the Sales Tax Act 1990.

Meanwhile, the manufacturing sector bore the brunt of this tax expenditure, amounting to Rs 98.2 billion. The largest share (43 percent) of expenditure under the sales tax regime was attributed to Petroleum, Oil, and Lubricants (POL) Products, totaling Rs. 1.25 trillion.

According to the FBR report, an increase of Rs 327.91 billion was observed in the exemption under the Sixth Schedule for local supplies, mainly driven by the exemption on local fertilizer supply.

Overall, the GDP, Large Scale Manufacturing (LSM) sector, and export values witnessed massive growth, while inflation saw a notable increase. The report notes a gradual rise in tax expenditures over the past five years, with income tax expenditures remaining stagnant while sales tax and customs duty expenditures experienced significant growth.

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  • You know why exemption? Because there is main Fauji Fertilizer, public is not stupid now, all should be taxed on equal footing,

  • Your blog is a beacon of light in the often murky waters of online content. Your thoughtful analysis and insightful commentary never fail to leave a lasting impression. Keep up the amazing work!

  • Your blog has quickly become one of my favorites. Your writing is both insightful and thought-provoking, and I always come away from your posts feeling inspired. Keep up the phenomenal work!

  • Do you mean this includes Fauji Fertilizer? Why Tax exemptions for them? There are already Tax exemptions for Fauji Foundation and again there are no justifications for those exemptions as well. Please stop.

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