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A Critical Appraisal of Tax Expenditures in Pakistan

Author

Listed:
  • Mahmood Khalid

    (Pakistan Institute of Development Economics)

  • Naseem Faraz

    (Pakistan Institute of Development Economics)

Abstract

PTI Government presented a balanced budget for FY2021-22 under tough economic conditions with an aim to achieve GDP growth and manage fiscal balance. The outlay of budget for FY 2021-22 stood at Rs 8.49 Trillion, up 19% from revised numbers of previous year. Higher expenditures have not been matched by higher taxes though for the same period. Tax collection by FBR has increased by 9.92% in FY2021 over the last year. However it is a good tax revenue growth despite economic collapse of last year, but, a lot needs to be done on the tax policy side, especially, the concessionary regime extended. This resulted in need for a supplementary finance bill after the IMF 6th Review Mission � October 4-19, 2021. It is reported that the demand of IMF was Rs 700 Billion in lieu of GST Tax expenditures reduction which was conceded upto Rs 343 Billion. These concessions are often criticised for being influenced by the lobbying and rent seeking segments(Ahmed, 2019). PIDE has been repeatedly suggesting key reforms in the overall tax Policy regime thus making it conducive for growth (see PIDE, 2020; 2021).

Suggested Citation

  • Mahmood Khalid & Naseem Faraz, 2022. "A Critical Appraisal of Tax Expenditures in Pakistan," PIDE Knowledge Brief 2022:50, Pakistan Institute of Development Economics.
    • Handle: RePEc:pid:kbrief:2022:50
    as

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    References listed on IDEAS

    as
    1. Ahmed Muhammad Ashfaq, 2019. "Pakistan: Economy under Elites – Tax Amnesty Schemes, 2018," Asian Journal of Law and Economics, De Gruyter, vol. 10(2), pages 1-18, August.
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    More about this item

    Keywords

    Critical Appraisal; Tax Expenditures; Pakistan;
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