Islamabad, 23 May 2025: Budget 2025-26 is shaping up to be a pivotal financial roadmap, as the federal government evaluates fresh taxation strategies that could bring in approximately Rs. 600 billion.
These potential revenue measures are being aligned with commitments made to international lenders and domestic fiscal goals.
Digital Earnings in the Tax Net
As part of Budget 2025-26, authorities are reportedly planning to impose a 3.5 percent tax on income generated through digital platforms such as YouTube and TikTok. Estimates suggest this move could contribute Rs. 52.5 billion to the national treasury.
A similar policy is being explored for high-value pensioners, where a 2.5 to 5 percent tax on pensions exceeding Rs. 400,000 monthly is under review. Given the rising cost of pension payouts already at Rs. 673 billion and projected to reach Rs. 1 trillion this measure could fetch Rs. 20–40 billion.
Consumer Goods and GST Adjustments
In Budget 2025-26, adjustments to the general sales tax (GST) on select consumer items are likely. These changes would tie GST rates to real market prices based on data from the Pakistan Bureau of Statistics.
For instance, GST on sugar is currently assessed at Rs. 72.22 per kilogram, whereas the retail price has soared to Rs. 150. Revising the GST baseline could result in an additional Rs. 70–80 billion in tax revenue.
Excise Duties and Energy Levies
Processed food items like snacks and biscuits may face a 20 percent hike in excise duty, with a broader aim of reaching 50 percent by 2029. Similar increases are anticipated in the cigarette sector.
Additionally, a carbon tax through a Rs. 5 per litre increase in petroleum levies including on diesel and furnace oil is under consideration, which could yield Rs. 35–80 billion, depending on the final rate.
Expanding the Tax Base
To eliminate tax evasion, the government has moved to abolish the non-filer category, potentially prohibiting such individuals from buying vehicles and real estate.
Amendments under Section 114C of the Income Tax Ordinance are expected to support this effort. Retailers may also see higher advance tax requirements, helping meet the IMF’s Rs. 295 billion target by December 2025.
The IMF has further advised a 5 percent excise duty on fertilisers and pesticides, which could generate over Rs. 30 billion, underscoring the aggressive revenue drive under Budget 2025-26.
