The Federal Board of Revenue (FBR) has clarified that the Federal Excise Duty (FED) levied on specific products and services is not classified as a tax expenditure. Consequently, FED has been excluded from the FBR’s Tax Expenditure Report-2025.
The report, covering Fiscal Year 2023–24, provides tax expenditure estimates primarily for Income Tax, Sales Tax, and Customs Duty, totaling an estimated Rs2.43 trillion.
According to the FBR, FED differs from general taxes that include exemptions, exclusions, credits, or allowances, as it is a targeted levy without broad-based concessions.Â
This distinction is why FED is not incorporated within the tax expenditure framework, the report stated.
