Govt gives Rs1.15tr in tax break.

In an alarming development, the government doled out a record Rs1.15 trillion in tax exemptions to the affluent people and under international commitments in the outgoing fiscal year, breaking its own one-year-old record, showed the Pakistan Economic Survey 2019-20.

Cumulatively, the PTI government has given Rs2.12 trillion in tax exemptions during its first two years in power - an amount that is sufficient to build two Mainline One (ML-I) projects of the China-Pakistan Economic Corridor (CPEC). The estimated cost of the ML-1 project is Rs1.1 trillion or $7.2 billion and the government has given Rs2.2 trillion in tax concessions.

The Federal Board of Revenue (FBR) has estimated the cost of what it called tax expenditures at Rs1.15 trillion on account of income tax, sales tax and customs duty concessions in this fiscal year, according to the survey.

It was the highest amount of concessions given in any fiscal year. It was also higher by Rs177.6 billion or 18.2 percent compared with the concessions given in the previous fiscal year when the PTI government gave Rs972.4 billion in exemptions.

Withdrawing the tax concessions, largely availed by the affluent, has remained an integral part of the International Monetary Fund (IMF) programmes. In the last IMF programme, which ended in September 2016, the federal government claimed to have withdrawn Rs347 billion worth of Statutory Regulatory Orders (SROs). Yet, the cost...