The federal government has officially presented the Budget for the fiscal year 2025-26, with Finance Minister Muhammad Aurangzeb delivering the announcement at the Parliament House. The total budget outlay stands at Rs. 17.6 trillion, marking a 2% year-on-year increase.
Key highlights include the Federal Board of Revenue’s (FBR) tax target set at Rs. 14.1 trillion, reflecting a 19% rise compared to the previous year. The government has allocated Rs. 2.5 trillion for defense expenditures, while current expenditures are projected at Rs. 16.3 trillion. Non-tax revenue is estimated at Rs. 5.1 trillion.
The tax on dividends remains unchanged at 15%. Among the new fiscal measures, online retailers will be required to collect 18% sales tax from sellers. The government has also introduced a new tax credit scheme for houses up to 10 marlas.
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Significant reforms include the withdrawal of tax exemptions for individuals receiving higher pensions, and the implementation of a cut-off date for benefits to spouses of deceased government employees. A strict crackdown on tax evasion was also introduced—items without barcodes or tax stamps will now be seized, and individuals found using incorrect CNIC numbers or NTNs may face fines of up to Rs. 500,000 and a three-year prison sentence.
Additionally, the government has imposed a new 18% sales tax on the import of solar panels. For property transactions, the advance tax on the purchase of immovable property by tax filers has been reduced, whereas cash withdrawals by non-filers will now face increased advance tax.
A particularly impactful measure is the imposition of heavy taxes on online shopping and cash-on-delivery transactions, signifying a strong push toward digital documentation and improved tax compliance.
