FBR Incurs Rs. 78 Billion Annual Loss Due to Tax Exemptions Given to Pensioners

The income tax exemption to pensioners has caused an annual revenue loss of Rs. 78 billion to the national kitty. According to the analysis of the Federal Board of Revenue’s (FBR) Tax Expenditure Report 2024, tax exemption to pensions has caused a revenue loss of Rs. 78,339.47 million during 2022-23. About the major beneficiary sectors under Income Tax Expenditure, the cumulative sum of income tax expenditures availed by the top 10 sectors, amounts to Rs. 459,164.50 million which is 96.27 percent of the total income tax expenditure. It accounts for 11.84 percent of the total tax expenditure incurred during 2022-23. The income tax exemption to the financial sectors caused a revenue loss of Rs. 115 billion. The income tax exemption to social security caused a revenue loss of Rs. 60 billion during the period under review. The income tax exemption to state apparatus has a negative revenue impact of Rs. 57 billion to the national exchequer. The income tax exemption to the energy and mining sector caused a revenue loss of Rs. 41 billion during the period under review. The cost of exemption granted to the health and pharmaceutical sector stood at Rs. 14 billion in 2022-23, the report added.