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.

Regulatory Duty imposed/ raised on wide range of items

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.

Copyright Business Recorder, 2024