ISLAMABAD - Pakistan's tax expenditures in the form of exemptions have been recorded at Rs394.6 billion during the outgoing financial year 2015-2016.

The expenditures, which in 2014-15 were Rs665 billion, decreased by 40 percent to Rs394.6 billion during the fiscal year 2015-2016, according to the Economic Survey released on Thursday.

The cost of exemptions with respect to income taxes remained Rs67.3 billion in the outgoing fiscal year.

Meanwhile, the cost of sales tax exemptions has been estimated to be Rs207.3 billion during the outgoing financial year. Similarly, the cost of customs exemptions has been projected at Rs119.99 billion during.2015-2016.

The break-up of estimated revenue loss under the head of income tax expenditures reveals that Rs1.1 billion loss occurred due to exemptions given to pensioners; Rs5.5 billion due to exemption on income from funds; board of education; universities and computer training institutions; Rs1.4 billion on donations and contributions to charitable organisations; Rs50.2 billion on independent power producers; Rs0.3 billion on income from a certain trust, welfare or charitable institutions and non-profit organisations.

Similarly, income tax exemption worth Rs1.8 billion was given to the profits on debt/interest from government securities and certain foreign currency accounts in the outgoing FY; Rs0.8 billion on IT export; Rs1.7 billion on capital gains and Rs4.5 billion on other sectors and enterprises.

According to the survey, sales tax exemptions were provided under the export facilitation schemes and general and sector specific SROs.

Further details reveal that tax exemption worth Rs43.4 billion was given due to concessionary rate of sales tax on raw materials; intermediary inputs and finished goods relating to textiles, carpets, leather, sports and surgical sectors.

Meanwhile, customs exemptions are mainly given on raw materials and components, plants, machinery and equipment imported by high-tech and value added industries, imports for energy sector projects

Exemptions are also given to exploration and production companies. Some of these exemptions are due to international contractual obligations. The government gave Rs119.99 billion customs exemptions during the outgoing fiscal year.

Concession on Customs Duty on goods, imported from SAARC and ECO countries, cost Rs247 million; exemption from Customs Duty on imports from Sri Lanka cost Rs1.22 billion; exemption from Customs Duty on imports into Pakistan from China cost Rs30.7 billion; conditional exemption of Customs Duty on import of raw materials and components for the manufacture of certain goods  cost Rs2.002 billion and the exemption from Customs Duty and Sales Tax on the import of specified machinery, equipment, apparatus and item cost Rs13.204 billion.

Exemption from Customs Duty given to the vendors of Automotive Sector cost Rs19.53 billion while the exemption from Customs Duty on OEMs of the Automotive Sector cost Rs22.45 billion during the outgoing financial year.