The Federal Board of Revenue (FBR) has reported a significant jump in income tax credits, which surged to Rs78 billion in tax year 2024 compared to Rs24 billion in the preceding year.
The sharp rise has been highlighted in the official Tax Expenditure Report 2025, showing a marked increase in incentives extended to various sectors of the economy.
According to the report, the largest portion of these credits was claimed by charitable organizations, welfare institutions, and non-profit entities.
Tax credit under Section 100C, aimed at such organizations, alone accounted for more than Rs59 billion, making it the single biggest contributor to the overall total. This reflects the growing recognition of the non-profit sector’s role in social welfare and economic activity.
Other major beneficiaries of tax credits included individuals contributing to pension funds, corporate manufacturers investing in machinery, and businesses generating employment. Smaller contributions were also made by those installing point-of-sale machines and startups engaged in technology and IT-enabled services.
The FBR noted that tax credits play a vital role in supporting targeted sectors, encouraging investment, and promoting compliance. By providing such incentives, the government seeks to stimulate economic growth while ensuring that relief is directed toward activities that add long-term value.
The remarkable increase from Rs24 billion to Rs78 billion within a year underscores the government’s reliance on credits as a strategic tool for fiscal policy, particularly in times of economic uncertainty.