Tax expenditures are an important fiscal policy tool being widely used around the globe. Many developed and developing nations have adopted better tax expenditure policies and reforms. In case of Pakistan, tax expenditures have been increasing over the years, but no framework for allocation and evaluation exists. This study intends to assess the economic impact of tax expenditures on the overall economic growth of Pakistan. For this purpose, both the qualitative and quantitative research methods have been applied to give a better and clear picture. For qualitative analysis, interviews with concerned departments were conducted, policy documents, reports and expert opinions were analyzed. The results showed that most of the tax expenditures are doing more harm than good and causing a huge loss to the national exchequer. These expenditures are being done to favor the few elites which misuse them to avoid and evade taxes. Furthermore, these expenditures are discriminatory as well as distortionary. Using quantitative research methods, this study aimed to figure out the growth impact of tax expenditures on economic growth. Due to data limitations of Pakistan, we used panel data for seventeen countries and five variables for the years 2003-2020. After checking the issues of heterogeneity and multicollinearity, we used the Hausman test. The Hausman test showed the negative impact of tax expenditures on GDP growth. This means that tax expenditures are a potential revenue loss and should be reconsidered. Supervisor:- Dr. Mahmood Khalid