Pakistan’s tax expenditure lower than global average: FBR

ISLAMABAD: The “Tax Expenditure Report-2025” issued by the Federal Board of Revenue (FBR) on Monday revealed that the tax expenditure estimates for Pakistan, as a percentage of gross domestic product (GDP), are lower when compared to global averages.

The report explained in detail the ‘Global Average Revenue Foregone’. Over a 15-year period, Pakistan’s tax expenditure remained at 2.1 percent of GDP, which is significantly lower than the global average of 4.0 percent.

The total Tax Expenditure estimate for 2023-24 is Rs. 2,434.73 billion, which accounts for 2.32 percent of the GDP and 26.18 percent of the total tax collection by the Federal Board of Revenue (FBR) during this period.

Among the various taxes, the Tax Expenditure for Sales Tax was the highest, amounting to Rs. 1,237.11 billion, followed by Customs Duty at Rs. 652.39 billion, and Income Tax at Rs. 545.23 billion.

In FY 2023-24, the proportion of total tax expenditure attributable to Sales Tax has decreased, while the share of Income Tax and Customs Duty expenditure has risen, the FBR’s report added.

Copyright Business Recorder, 2025