Karachi, January 14, 2025 – The Federal Board of Revenue (FBR) has revealed that the financial sector emerged as the largest beneficiary of income tax relief during the tax year 2024. The findings were disclosed in a detailed report highlighting the exemptions and concessions provided across various sectors.
The FBR reported that a total of Rs 459 billion in income tax relief was granted in the form of exemptions and concessions during the period. Of this amount, the financial sector alone accounted for a significant 25.27%, availing Rs 116 billion worth of tax concessions or exemptions. This underscores the sector’s dominant position in benefitting from the FBR’s tax relief measures.
Breakdown of Tax Relief Across Sectors
According to the FBR, the pension segment was the second-largest beneficiary, receiving Rs 78.34 billion in tax exemptions during the year. This substantial relief reflects the government’s focus on supporting retired individuals and reducing their financial burden.
Social security programs ranked third, with Rs 61 billion in tax relief. Taxpayers classified under Clause 56 of Part 4 of the Second Schedule of the Income Tax Ordinance, 2001, benefited from Rs 60 billion worth of exemptions, according to the FBR.
The FBR also reported that Rs 57.42 billion in tax relief was extended to state apparatus, indicating the prioritization of essential government functions. Additionally, the energy and mining sector benefited from Rs 41.35 billion in exemptions, supporting critical industries vital to national development.
Other Beneficiaries
The health and pharmaceutical sectors collectively received Rs 14.53 billion in tax relief, while the manufacturing sector availed Rs 13.61 billion. At the lower end of the spectrum, the education sector, despite its importance, received the least tax benefit among the top 10 sectors, amounting to Rs 6.52 billion.
FBR’s Perspective
The FBR highlighted that these tax relief measures are part of a broader strategy to stimulate economic growth, support essential sectors, and provide financial ease to specific segments of the economy. By offering significant concessions to the financial sector and other industries, the FBR aims to foster economic stability and incentivize growth in key areas.
These findings reinforce the pivotal role of the FBR in shaping fiscal policies that balance revenue generation with economic support.