Pakistan like other developing economies has adopted trade liberalization policy to integrate her to the global economy and undertake fiscal reforms to be able to complete her trade liberalization programs. Pakistan has reduced its tariffs in the economic history and efforts have been made to recover the fiscal cost of the trade liberlisation in the country. The objective of present study is to explore the fiscal cost of trade liberlisation in Pakistan. Using data 1951-2015 of tax revenues of Pakistan and identified 11 episodes of tariff reductions in the economic history of the country and consider whether Pakistan is able to recover those lost revenues through other tax resources. The findings of the study shows that although Pakistan being having lower tax capacity but the economy having tax friendly atmosphere and enough tax capacity to recover the loss of revenue with a short time period of 2 years and simultaneously within 10 years’ time period as well therefore it is needed to improve the performance of Tax collectors through tax reforms and fair and sound fiscal and monetary policies. It is imperative in the long run, Pakistan economy having a capacity to recover the loss of revenue resulted of the trade liberlisation policies. Therefore Trade liberlisation policies adopted by Pakistan are favorable for the economic welfare of the country. It is suggested to encourage trade liberalisation policies accompanied with continue supportive monetary and fiscal policies to improve environment and trade facilitation focusing CPEC (China-Pakistan Economic Corridor) routs as well.