Pakistan’s federal government is set to forgo Rs2,352.81 billion in tax revenue during the 2024-25 fiscal year, according to new estimates.
The figure represents the total tax expenditure — revenue lost due to exemptions, deductions, and incentives embedded in the tax code — and highlights the significant cost of fiscal concessions to the state budget.
The Rs2.35 trillion figure provides a concrete benchmark for evaluating the efficiency of current tax policies and the potential upside from reforming or eliminating inefficient incentives.
The estimate, reported by Brecorder, signals the magnitude of the revenue gap that policymakers must address through either broader tax base expansion or reduced spending.
With fiscal space already tight, the scale of these foregone revenues adds complexity to efforts aimed at stabilizing public finances and reducing the deficit.
Tax expenditure analysis is increasingly critical for emerging markets like Pakistan, where structural weaknesses in revenue collection often force reliance on external financing.
The Rs2.35 trillion figure provides a concrete benchmark for evaluating the efficiency of current tax policies and the potential upside from reforming or eliminating inefficient incentives.