Pakistan tax exemptions totalled more than Rs11 trillion over five years, according to figures presented by the Ministry of Finance in the National Assembly.
The figures came in a written response to a question from lawmaker Shaista Parvez. The ministry gave a year-by-year breakdown of exemptions granted between fiscal year 2020 to 2021 and fiscal year 2024 to 2025.
The total, added up from the ministry’s own yearly figures, comes to Rs11.04 trillion. That is the amount of tax revenue the state chose not to collect through exemptions over the five-year period, as reported by ProPakistani.
Pakistan tax exemptions by year
The yearly figures show a sharp rise, then a plateau at a high level:
| Fiscal year | Tax exemptions |
|---|---|
| 2020 to 2021 | Rs1.48 trillion |
| 2021 to 2022 | Rs2.24 trillion |
| 2022 to 2023 | Rs2.54 trillion |
| 2023 to 2024 | Rs2.43 trillion |
| 2024 to 2025 | Rs2.35 trillion |
The largest single year was 2022 to 2023, at Rs2.54 trillion. After that, the yearly total eased slightly, but it stayed above Rs2 trillion in every year from 2021 to 2022 onward.
In plain terms, exemptions stayed above Rs2 trillion a year for four straight years.
Why the figures matter now
A tax exemption is not cash paid out by the government. It is tax that would otherwise have been due, but was waived, reduced or not collected under a special provision.
Governments use exemptions to support chosen sectors, encourage investment or keep prices down for certain goods. Critics argue that broad exemptions shrink the tax base and force higher rates on everyone else.
Parliamentary Secretary Barrister Saad Wasim told the house that the exemptions had been granted to improve the tax system. The written response did not give a sector-by-sector breakdown in the published summary, so it is not yet clear which industries or activities received the largest share.
The disclosure lands at a difficult moment for public finances. The State Bank of Pakistan has raised its policy rate to 12 per cent, and Feature Pakistan has reported that the SBP rate hike divided the business community. At the same time, Pakistan’s regional trade deficit reached $4.97 billion, which adds to pressure on the external account.
Against that background, Rs11 trillion in exemptions over five years is a central question for fiscal policy. If exemptions are well targeted, they can support growth and jobs. If they are broad and poorly tracked, they can leave the state short of revenue while delivering little in return.
What to watch next
The next step is detail. Lawmakers and analysts will want the ministry’s full breakdown by sector, so they can judge which exemptions worked and which did not.
They will also want to know how the exemptions relate to current revenue. Pakistan has taken a $750 million Asian Development Bank loan for pension and public-private partnership reforms, which shows that the state is still borrowing to meet its needs while large sums go uncollected through the tax system.
For now, the headline figure stands on its own: more than Rs11 trillion in five years, with the peak in 2022 to 2023 and no year below Rs2 trillion since 2021 to 2022. The debate now is whether that money bought the growth and investment it was meant to encourage.
Frequently asked questions
How much did Pakistan grant in tax exemptions over five years?
More than Rs11 trillion, based on Finance Ministry figures given to the National Assembly. The yearly figures add up to Rs11.04 trillion.
Which year saw the largest exemptions?
Fiscal year 2022 to 2023, at Rs2.54 trillion.
Who asked for the figures?
Lawmaker Shaista Parvez raised the question, and the Ministry of Finance gave a written response with the yearly breakdown.
Why were the exemptions granted?
Parliamentary Secretary Barrister Saad Wasim said the exemptions had been granted to improve the tax system. A sector-by-sector breakdown was not included in the published summary.
