Pakistan’s tax exemptions to various sectors cost the country over $21 billion this year, more than the $17 billion it needs to repay in commercial and bilateral external debt, as revealed in the latest economic survey.Pakistan’s finance minister Muhammad Aurangzeb presented the Economic Survey of Pakistan 2024-25 on Monday, which outlines various economic developments and indicators for the fiscal year.The survey indicates that tax exemption costs increased to Rs 5.8 trillion in fiscal year 2024-25, showing a substantial rise of Rs 2 trillion from the previous year’s Rs 3.9 trillion under the current government, according to news agency PTI.The survey reveals a Rs 1.96 trillion or 51% increase in tax expenditure, despite the Pakistan Muslim League-Nawaz (PML-N) government’s removal of several exemptions in its previous budget.The economic survey shows that tax concessions and exemptions continue to rise annually, despite multiple attempts to reduce them. These exemptions, established over time, are safeguarded under three separate tax laws.Sales tax exemptions reached Rs 4.3 trillion in the outgoing fiscal year, showing a 50% increase from Rs 2.9 trillion in the previous period.Income tax exemptions rose by 68% to Rs 801 billion from Rs 477 billion, whilst the government increased tax burden on salaried individuals but maintained exemptions for other sectors like retailers.Customs duty exemptions rose by Rs 243 billion or 45% to Rs 786 billion this fiscal year from Rs 543 billion previously, according to the report.The Rs 5.8 trillion in “tax expenditures for 2025” raises questions about the reliability of earlier reported losses, it added.The continuous growth in tax expenditures, despite governmental efforts to reduce them, suggests either the implementation of numerous undisclosed tax exemptions or underreporting of previous figures. The report says the sharp rise in tax exemption costs is not due to any major increase in economic activity.