FBR Preparing Updates for the FY2025-26 Budget
The FBR is preparing new updates for the upcoming budget, and one important step they’re considering is increasing the withholding FBR Tax on E-Commerce on those who buy or sell through online platforms.
The Federal Board of Revenue is expected to share its new tax proposals with the IMF team, as official talks to finalize next year’s budget are starting tomorrow.
The FBR is proposing an increase in the 0.25% withholding tax on major online platforms like Daraz, OLX, Zameen, and PakWheels in the FY2025-26 budget. This step is designed to boost tax revenue. By implementing measures such as the FBR Tax on E-Commerce, the government aims to enhance its financial capacity.
These changes are part of a larger fiscal reform plan. The government will share the plan with Prime Minister Shehbaz Sharif on May 15. They expect to complete the full budget by June 2.
Proposal to Remove 10% Super Tax on Corporations
To restore investor confidence, the FBR has proposed gradually removing the 10% super tax on large corporations. This tax has caused corporate tax rates to soar to 39% in sectors such as banking, cement, oil, and tobacco. Officials believe that removing the tax could unlock over Rs. 200 billion currently stuck in legal battles.
To reduce the financial burden on salaried individuals, the government is planning to increase the monthly tax-free income limit from Rs. 50,000 to Rs. 80,000, which will make annual incomes up to Rs. 960,000 tax-exempt. Additionally, they are considering removing the 10% surcharge on high-net-worth individuals earning more than Rs. 10 million a month.
Although the relief package offers some benefits, not everyone is pleased. One of the most debated proposals is the introduction of a 5% income tax on pensioners, which has raised concerns among retired government employees and union representatives.
To support local industries and the real estate sector, the government is planning a set of tax relief measures. These may include removing withholding taxes on imported raw materials and reducing taxes on property deals. While imported cars could see lower duties, taxes on locally assembled vehicles with engines above 1300cc are likely to go up.
keep reading: Pakistan Achieves Major Milestone, Over 12.5 Million Businesses Registered with FBR
Although the government is planning different tax changes, officials agree that reaching the Rs. 12.3 trillion revenue target won’t be easy without some strong and serious reforms.
In the upcoming talks with the IMF, the main focus will likely be on how to control government spending, improve the digital tax system. Find stable ways to increase national income. especially through better implementation of the FBR Tax on E-Commerce policy.
With the surge in online transactions across Pakistan. The stricter implementation of the FBR Tax on E-Commerce is emerging as a key measure. It aims to enhance transparency and broaden the country’s tax base.
