Businesses and individuals received Rs. 1.75 trillion in tax exemptions and concessions in the current fiscal year 2021-22, compared to Rs. 1.31 trillion in the previous fiscal year, according to the Economic Survey 2021-22 released on Thursday.
In the current fiscal year, tax exemptions cost Rs. 442.7 billion more. The government, on the other hand, did not provide specifics on revenue loss due to charitable tax credits, a tax credit under Section 100C, and revenue loss due to a tax credit for the stock market and insurance under Section 62 of the Income Tax Ordinance.
In FY2021-22, the tax loss due to income tax exemptions was Rs. 399.6 billion, compared to Rs. 448 billion in the previous fiscal year.
The survey also failed to identify revenue losses due to independent power producers’ (IPPs) tax-free commercial income. Similarly, there are no specifics on how much money was lost due to capital gains.
Tax credits resulted in a revenue loss of Rs. 65.465 billion in 2021-22, compared to Rs. 105.342 billion in 2020-21, a 38 percent decline.
In FY2021-22, the cost of the tax relief due to tax credits has decreased by Rs. 39.877 billion.
The FBR lost Rs. 760.543 billion in revenue in 2021-22, owing to sales tax exclusions provided under the Sales Tax Act’s Sixth Schedule (Exemption Schedule).
The revenue loss was Rs. 329.942 billion last year.
In 2021-22, the FBR lost roughly Rs. 191 billion due to sales tax exemptions provided under the Sales Tax Act, the 1990s Eight Schedule (Conditional Exemption), compared to Rs. 208 billion in 2020-21.
Conditional exemption income losses have been reduced by Rs. 17 billion.
In 2021-22, the overall revenue loss from the zero-rating provision granted to different sectors under the Fifth Schedule of the Sales Tax Act of 1990 was Rs. 11.367 billion, compared to Rs. 12.887 billion the previous fiscal year.
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