ISLAMABAD: The National Assembly was informed that the government granted tax exemptions and concessions worth more than Rs11,000 billion between fiscal year 2020-21 and 2024-25, according to figures presented by the Ministry of Finance, ARY News reported.
The ministry informed the house that tax exemptions worth Rs1,482 billion were granted in fiscal year 2020-21, while the amount rose to Rs2,239 billion in 2021-22.
In fiscal year 2022-23, tax exemptions and concessions amounted to Rs2,540 billion, followed by Rs2,352 billion in 2023-24 and Rs2,352 billion in 2024-25.
During the session, Jamiat Ulema-e-Islam (JUI) MNA Alia Kamran questioned the public benefit of these tax exemptions and asked whether ordinary citizens had gained anything from the concessions.
Alia Kamran also asked the government to clarify whether 2027 would be the final year in which Pakistan would borrow from the International Monetary Fund (IMF), referring to the prime minister’s announcement that it would be the last year of borrowing from the lender.
Responding to the question, the parliamentary secretary said he could not give a definitive assurance but hoped that 2027 would be the final year of Pakistan’s IMF borrowing.
Separately, the government is considering a mini-budget to implement tax measures and levies under the new automotive policy, sources said.
According to sources, electric vehicles (EVs) are expected to receive a sales tax relief worth Rs 85 billion under the proposed policy.
The International Monetary Fund (IMF) has reportedly demanded raising the sales tax on EVs from 1% to 18%. However, official government documents suggest maintaining the 1% sales tax on EVs valued up to $75,000, which accounts for the Rs 85 billion tax relief.
Sources added that the Rs 85 billion tax shortfall will be recovered through an alternative plan. To generate replacement revenue, a finance bill may be introduced to impose a Federal Excise Duty (FED) and an Automotive Development Levy.
Under the new auto policy, a 2% levy will be imposed on vehicles with engine capacities between 1001 cc and 2000 cc, while a 10% levy will apply to vehicles of 2001 cc and above.
Official documents confirm that the Automotive Development Levy will apply to all locally assembled and imported petrol and Internal Combustion Engine (ICE) vehicles. Furthermore, a 10% Federal Excise Duty may be imposed on EVs priced over Rs 20 million, alongside a new carbon levy on petrol and ICE vehicles.
The government expects to collect Rs 25 billion from the carbon levy on petrol, diesel, and ICE vehicles, and Rs 37 billion from general levies on these vehicles. Additionally, an estimated Rs 45 billion will be generated by imposing levies on commercial buses and trucks under the new policy.