Rs44B Revenue Lost to Exporter Tax Exemptions

Duties and tax exemptions extended to Pakistani exporters under various schemes led to an estimated revenue loss of nearly Rs44 billion for the national exchequer during 2023-24, according to the Federal Board of Revenue (FBR)’s Tax Expenditure Report-2025.

The report identified nine export-related schemes and Statutory Regulatory Orders (SROs) contributing to the shortfall. The Duty and Tax Remission for Exporters (DTRE) under SRO.450(I)/2001 accounted for Rs734.66 million in revenue loss, while the Export Processing Zone under the same SRO resulted in a Rs23 billion shortfall.

The Manufacturing Bond Scheme, also under SRO.450(I)/2001, caused a Rs712 million impact on the treasury.

Temporary Import concessions under SRO.492(I)/2009 led to approximately Rs17 billion in foregone revenue, while SRO.327(I)/2008 for Export Oriented Units contributed to a Rs2 billion loss.

Other exemptions under SRO.326(I)/2008 and Chapter 99 of the Pakistan Customs Tariff, covering temporary imports of machinery, packing materials, excavation equipment, and scientific equipment, had minimal fiscal impact, the report noted.

The FBR report underscores the cumulative effect of these export facilitation measures on national revenue, offering a comprehensive analysis of the financial implications of incentives designed to boost exports.