The government granted tax exemptions and concessions worth more than Rs11,000 billion between fiscal year 2020-21 and 2024-25, the National Assembly was told. The figures were presented by the Ministry of Finance.
Lawmakers also heard questions about who benefits from the relief, along with an exchange over future IMF borrowing. Separately, sources said the government is weighing a mini-budget linked to a new automotive policy.
Year-by-year breakdown of exemptions since 2020-21
The finance ministry gave the house the following annual figures for tax exemptions and concessions:
- 2020-21: Rs1,482 billion
- 2021-22: Rs2,239 billion
- 2022-23: Rs2,540 billion
- 2023-24: Rs2,352 billion
- 2024-25: Rs2,352 billion
MNA questions public benefit and IMF borrowing timeline
Jamiat Ulema-e-Islam (JUI) MNA Alia Kamran questioned whether the exemptions served the public, asking if ordinary citizens had gained anything from the concessions.
She also asked the government to clarify whether 2027 would be the last year Pakistan borrows from the International Monetary Fund. She pointed to the prime minister’s earlier statement that this would be the final year of borrowing from the lender. In reply, the parliamentary secretary said he could not give a definitive assurance, but expressed hope that 2027 would be the final year of IMF borrowing.
Proposed EV sales tax relief and new auto levies
Sources said the government is considering a mini-budget to implement tax measures and levies under the new automotive policy. Electric vehicles are expected to receive sales tax relief worth Rs 85 billion under the proposed policy.
The IMF has reportedly demanded that the sales tax on EVs be raised from 1% to 18%. Official government documents, however, suggest keeping the 1% rate on EVs valued up to $75,000, which accounts for the Rs 85 billion relief. Sources added that this shortfall would be recovered through an alternative plan, with a finance bill possibly introducing a Federal Excise Duty and an Automotive Development Levy.
Under the new policy, vehicles with engine capacities between 1001 cc and 2000 cc would face a 2% levy, while those of 2001 cc and above would face 10%. Official documents confirm the Automotive Development Levy would apply to all locally assembled and imported petrol and ICE vehicles. A 10% Federal Excise Duty may also 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, Rs 37 billion from general levies on these vehicles, and an estimated Rs 45 billion from levies on commercial buses and trucks.
