Tax revenue amounting to Rs. 461.49 billion has been lost in relation to four types of indirect taxes due to various tax concessions and exemptions granted during the first six months of 2026, the Ministry of Finance has stated.
This was revealed in a report issued by the Ministry of Finance, Planning and Economic Development.
Accordingly, the revenue loss relates to four indirect taxes: Value Added Tax (VAT), Social Security Contribution Levy (SSCL), Excise Duty (Special Provisions), and Customs Import Duty.
According to the report, tax concessions granted on Value Added Tax (VAT) during the first six months of 2026 are estimated to have resulted in a revenue loss of Rs. 242.95 billion.
Meanwhile, tax concessions on the Social Security Contribution Levy during the same period are estimated to have resulted in a revenue loss of Rs. 135.27 billion.
The report issued by the Ministry of Finance further states that concessions on Customs Import Duty resulted in a revenue loss of Rs. 74.25 billion, while concessions on Excise Duty (Special Provisions) accounted for a loss of Rs. 9.02 billion.
Accordingly, the total estimated tax revenue loss from these four types of indirect taxes during the first six months of 2026 amounts to Rs. 461.49 billion.
Meanwhile, the Ministry of Finance has also pointed out that the estimated revenue loss resulting from corporate income tax concessions has increased.
Accordingly, corporate income tax revenue losses, which stood at Rs. 119.29 billion in the 2023/24 assessment year, increased to Rs. 186.07 billion in the 2024/25 assessment year, representing a 26% increase.
Similarly, the estimated revenue loss resulting from personal income tax concessions was Rs. 10.46 billion in the 2023/24 assessment year. This figure increased to Rs. 36.28 billion in the 2024/25 assessment year.
The report also indicates that the revenue loss from personal income tax concessions increased by 246.8%.
Meanwhile, it is estimated that tax exemptions granted on domestically assembled vehicles during the first six months of 2026 resulted in a tax revenue loss of Rs. 9,005 million.
This accounts for 99.8% of the total estimated revenue loss from Excise Duty (Special Provisions) during the relevant period.
Furthermore, the report reveals that 89.8% of the revenue lost through Customs Import Duty concessions during the first six months of 2026 was attributable to tax concessions granted for general purposes and special projects under Section 19(A) of the Customs Ordinance.
The Ministry of Finance states that these tax concessions and exemptions have been granted to achieve various policy objectives, including promoting investment, developing exports, encouraging economic growth and providing social protection.
However, the report emphasizes the importance of continuously evaluating the fiscal impact and policy benefits of such concessions, as they result in a reduction or deferral of the tax revenue that the government would otherwise collect.
