Islamabad, June 9, 2025: The government is gearing up to broaden the tax net and eliminate multiple exemptions in the upcoming Budget 2025–26, following recommendations from the International Monetary Fund (IMF) to strengthen fiscal discipline.
Insider sources revealed on Monday that fresh tax measures may target previously untaxed sectors, including agricultural income, digital platforms, and freelancer earnings. Meanwhile, discussions are underway to remove the Federal Excise Duty (FED) on property deals, alongside possible tax reductions on beverages and tobacco products.
On the relief front, salaried employees could benefit from limited concessions. Proposals on the table include a 10% tax relief for salaried workers, a pension hike ranging from 5% to 7.5%, and a 30% allowance boost for government employees in grades 1 to 16. Another consideration is integrating the current ad-hoc relief allowance directly into the basic salary structure.
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IMF officials have also pushed for taxing items such as fertilizers, pesticides, and bakery goods to further expand revenue streams. Furthermore, the government is set to revoke the longstanding tax exemption in the former FATA region, proposing a uniform 12% tax rate there. An upward revision of the Capital Gains Tax (CGT) on shares and property is also under review.
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These reforms align with the IMF’s broader agenda to formalize Pakistan’s economy, combat tax evasion, and implement sustainable fiscal policies ahead of the new budget.
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