Published June 5, 2026 Updated about 2 hours ago By Huzaima BukhariDr Ikramul HaqAbdul Rauf Shakoori On June 10, 2026, the federal government will unveil budget for fiscal year (FY) 2026-27 amidst familiar warnings about fiscal deficits, rising debt, IMF conditionalities and the alleged necessity of imposing additional taxes. Once again, citizens are expected to believe that Pakistan suffers from a shortage of revenue. The official narrative suggests that fiscal stability requires higher taxation, stricter enforcement and continued sacrifices by already overtaxed segments of society but facts tell an entirely different story. For nearly three decades, articles in these pages and elsewhere have highlighted the phenomenon of “foregone taxes in trillions”. Shockingly, the issue attracted little policy attention. Of late, official reports of the Federal Board of Revenue (FBR), Economic Surveys of Pakistan and even studies by the Pakistan Institute of Development Economics (PIDE) confirm that concerns were neither exaggerated nor misplaced. Pakistan’s fiscal deficit is not merely the result of inadequate taxation. It is substantially a consequence of trillions of rupees voluntarily surrendered through tax expenditures. The following official figures, extracted from annual Economic Surveys and FBR’s website, illustrate the magnitude of the issue: =========================================== Table: Tax Expenditure (2010-11 to 2024-25) =========================================== Fiscal Year Tax Expenditure (Rs billion) =========================================== 2010-11 150.3 2011-12 185.5 2012-13 239.5 2013-14 477.1 2014-15 415.8 2015-16 394.6 2016-17 415.8 2017-18 541.0 2018-19 972.4 2019-20 1150 2020-21 1314.3 2021-22 1482.3 GST on POL waived in March 2022 2022-23 2239.6 Excluding GST on POL 2023-24 3879.2 Excluding GST on POL 2024-25 2434.7 Excluding GST on POL =========================================== The Table exposes a startling reality. Federal tax expenditure increased almost sixteen-fold between FY2010-11 and FY2024-25. The latest figure of Rs. 2.435 trillion (not including forgone sales tax on petroleum products) exceeds the annual budgets of…