Pakistan’s taxation system offers disproportional treatment to different sectors. Some industries benefit from greater protection than others, and some industries are heavily taxed in comparison to others. The automobile industry of Pakistan has always enjoyed protection from foreign and domestic competition through different policy measures like SROs, adopted by the government of Pakistan time and again. The proposed study performs a cost-benefit analysis of those SROs which provide tax concessions and exemptions with a special focus on the automobile sector of Pakistan. There are several costs and benefits associated with SROs; potential costs include distortions in the competitive economic environment, disruption of the level playing field, tax expenditures, rent-seeking, and complexity in the tax regime, while benefits include revenue generation, employment generation, and support, and promotion of domestic industries. To measure and quantify the cost of SROs and associated benefits, the study considered all the concessionary Customs Duty SROs related to the automobile industry of Pakistan issued by the Federal Board of Revenue (FBR) during the last ten years (2010-2020). Data is collected from the World Integrated Tarde Solution (WITS), Federal Board of Revenue (FBR), International Trade Center (ITC), and Organization for Economic Co-operation and Development (OECD). Costs have been calculated in terms of tax expenditures and benefits have been calculated in terms of the net social welfare effect (consumer surplus plus producer surplus). Tax expenditures are calculated as the gap between potential tax revenue, which does not contain tax concessions and exemption, and the realized tax revenue with these concessions while a simulation exercise is performed to calculate the net welfare effects of SROs. This study concluded that the costs of the considered SROs i.e. tax expenditures ($6.683 billion) are much greater than their benefits i.e. social welfare ($8.420 million). Supervisor:- Dr. Ahmad Waqar Qasim Co-supervisor:- Dr. Muhammad Idrees Khawaja