The Government of Pakistan has announced plans to introduce additional tax measures worth Rs. 200 billion starting January. The move is part of efforts to ensure that revenue targets are met and government spending remains within agreed limits under the $7 billion IMF bailout programme.
According to reports, the Government may increase income tax on landline and mobile calls, as well as raise the withholding tax on bank cash withdrawals. These measures will be triggered only if the Federal Board of Revenue (FBR) fails to meet its revenue target by the end of December or if government expenses exceed the approved thresholds.
Other potential measures include increasing the sales tax on solar panels from 10% to 18% and extending the federal excise duty (FED) to confectioneries and biscuits. The Government is also considering raising the standard sales tax rate to 19%, which could generate Rs. 225 billion annually. However, the current focus remains on targeted measures, including withholding tax, sales tax, and FED adjustments.
The FBR has already reported a Rs. 198 billion shortfall in the first three months of the fiscal year. As of October 29, tax collection stood at Rs. 3.65 trillion, leaving the Government needing Rs. 460 billion more within 48 hours to achieve the four-month target.
Among the proposed measures, the withholding tax on cash withdrawals for non-filers may double to 1.5%, potentially raising Rs. 30 billion yearly. Taxes on landline calls could increase from 10% to 12.5%, and cellular calls from 15% to 17.5%, generating Rs. 20 billion and Rs. 24 billion respectively. Additionally, a 16% FED on confectioneries and biscuits could collect Rs. 70 billion annually, raising effective taxes on processed foods to 38%.
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The Government’s contingency plan comes as Sindh and Punjab defer higher agriculture income tax collection for one year. Pakistan expects to recover half of the Rs. 200 billion in additional taxes during January–June 2026, subject to IMF approval and final fiscal targets.
