Pakistan’s Federal Budget 2025–26 introduces significant changes to taxes, duties, and incentives, focusing on fiscal discipline, boosting exports, and expanding the tax base.
What’s Getting Costlier:
- Higher Taxes on the Wealthy: Increased income tax for high earners and wealthy pensioners (5%), higher taxes on dividends and profits, and raised withholding taxes for non-filers.
- Solar Panels: Tax exemptions on imported solar panels withdrawn, pushing prices up.
- Cash & Digital Payments: Non-filers face 0.8% withholding on cash withdrawals. E-commerce and courier services will now collect 2% sales tax on deliveries.
- Imported Food: Imported packaged food now fully taxed at retail.
- Banking Restrictions & Audits: FBR gains powers to freeze bank accounts, seal properties, block tax credits; up to 2,000 auditors to be hired.
- Non-Filers: Face higher taxes and stricter enforcement.
- E-Commerce Sellers: Platforms required to register and report seller data.
- Importers of Consumer Goods: Loss of many reduced-duty benefits.
- High-Income Earners: Greater taxation on cash, savings, and investments.
Read more: Government Proposes Petroleum Levy Hike in Next Budget
What’s Getting Cheaper:
- Tax Relief for Salaried Class: Individuals earning up to Rs3.2 million annually get tax relief.
- Property Transfers: Federal Excise Duty on immovable property transfers eliminated.
- Raw Material Imports: Customs duties reduced on 2,624 items; zero-rating expanded to 3,100+ products. Many additional and regulatory duties reduced or abolished.
- Super Tax Relaxation: Companies earning Rs200–500 million to pay half of the previous super tax.
- Aviation Sector Boost: Import and leasing of aircraft made tax-free to aid PIA privatization
