Islamabad, June 7, 2025: The upcoming Finance Bill 2025 is expected to bring significant reforms in the withholding tax framework, placing greater pressure on non-filers.
From July 1, 2025, the gap between the tax rates applicable to filers and non-filers will be further expanded. At present, withholding taxes contribute more than 70% of total direct tax collections.
A prominent suggestion under consideration is to increase the rate of tax deduction on cash withdrawals by non-filers from the current 0.6% to somewhere between 1% and 1.2%.
The Federal Board of Revenue (FBR) is also weighing the possibility of raising tax rates on profit earned from savings and investments, along with proposing a fresh 1.5% withholding tax on the import value of goods.
READ MORE: FBR Revises Withholding Tax Regulations for Property Transactions
In the real estate domain, the tax rates applied to the buying and selling of immovable properties are likely to be adjusted to ease the process for both buyers and sellers.
READ MORE: ABAD Urges Govt to Reduce Withholding Tax, Eliminate FED on Construction Sector
Other recommendations on the table involve higher withholding tax rates on the supply of goods, rendered services, and contractual agreements. These steps are being aimed at expanding the tax net and reinforcing the government’s efforts to raise domestic revenue, all without introducing new direct taxation.
