Major decrease in duty exemptions/concessions witnessed

ISLAMABAD: The Federal Board of Revenue (FBR) has witnessed a major decrease in customs duty exemptions/concessions availed on the import of items under the free trade agreements (FTAs) and preferential trade agreements (PTAs) during 2022-23.

According to the new Tax Expenditure-Report (2024) issued by the Federal Board of Revenue (FBR), the Customs Duty Expenditure is estimated at Rs. 543.521 Billion based on data of FY 2022- 23.

The customs duty concessions are in the form of reduced rate, zero rate, exemptions to specific sectors/items, which are broadly scattered among items such as plant, machinery and equipment, chemicals, parts, renewable energy sources equipment etc. The largest portion of customs duty expenditure is given under Fifth Schedule amounting Rs. 190.688 billion, registering a growth of 10.24%, followed by General Concessions, amounting Rs. 146.59 billion.

The report added that the customs duty exemptions under Fifth Schedule, General Concessions and Exports Related Exemptions combined consist of 85.46% of customs duty expenditure. A significant increase is observed in the export related exemptions while major decrease is observed in FTA & PTA, etc. The customs duty expenditure is 0.65% of the GDP in 2022-23 and contributed 14.58% in the total tax expenditures. 4.3.1. Major Beneficiaries Customs Duty Expenditures The cumulative sum of custom duty expenditure for top 10 heads, amounts to Rs. 445,122.88 million which is 82% of the total custom duty expenditure. It accounts for 12% of the total tax expenditure incurred during the year 2022-23, the report added.—SOHAIL SARFRAZ