ISLAMABAD – Pakistan will unveil the federal budget for fiscal year 2025-26 today. The Pakistani government has planned to introduce new taxation measures to boost Public Revenue by around 200 billion PKR.
Exciting Tax Proposals on the Horizon for Budget 2025-26!
- Sales Tax on Solar
An 18 percent sales tax will be imposed on imported solar panels to expand the tax base.
- Sales Tax on E-commerce
For the past few months, we have seen a significant hike in Pakistan’s e-commerce industry. The government has decided to impose a 12 percent sales tax on every e-commerce transaction to bring the digital economy under formal taxation.
- Removal of Exemptions
Sharif spearheaded the government’s ambitious initiative to revise the existing exemption lists found in the Sixth and Eighth Schedules. This strategic move aims to remove a range of items that currently benefit from lower or even zero sales tax rates. As a result, many everyday products that shoppers have come to rely on may soon face a significant increase in sales tax, changing the landscape of affordability for consumers.
- Tax Relief on Medicines
To improve the health care facilities, certain medicines and cancer treatment equipment will be added to the tax exemption list to reduce the cost burden on patients. This initiative will be beneficial for the health sector of the country.
- Sales Tax on Goods from Former Tribal Areas
18 percent sales tax will be imposed on the goods produced in the erstwhile tribal areas.
- Updated Taxation on Imported Goods
Imported items like chocolates, coffee, and cereals will now be added to the Sales Tax Act’s third schedule. These items will be taxed based on their retail prices.
- New Excise Duty on Processed Foods
The government is set to impose a 5 percent excise duty on a variety of processed foods, including frozen items, instant noodles, biscuits, and frozen meat
- Removal of Sales Tax on Unregistered Tax Payers
The government may remove the additional 4 percent sales which is currently imposed on unregistered taxpayers.
These tax proposals are part of the Government’s strategy to increase Government revenue and control the country’s fiscal deficit ahead of the official budget announcement.
The final budget will be announced today at 5:30 pm, with the details of how these new tax measures will shape Pakistan’s economic condition in the coming year.
