Pakistan's federal government is set to unveil a Rs 17.6 trillion budget today for fiscal year 2025-26, introducing stricter measures for non-filers and significant changes to banking transaction taxes that will directly impact millions of citizens.
Key Budget Highlights:
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Cash Withdrawal Tax Hike
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The tax on cash withdrawals above Rs. 50,000 jumps from 0.6% to 1.2%
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Move aims to discourage cash transactions and document the economy
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Tough New Rules for Non-Filers
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Complete ban on foreign travel
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Restrictions on property and vehicle purchases
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Limitations on share trading and mutual fund investments
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Government plans to eliminate non-filer category entirely from tax system
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Petroleum & Carbon Taxes
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Petroleum levy to increase gradually from Rs. 78 to Rs. 100 per liter
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New 2.5% carbon tax introduced on industries
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Economic Targets & Allocations:
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Total revenue target: Rs. 19.3 trillion
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Tax collection goal: Rs. 14.13 trillion
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Rs. 8.3 trillion to be transferred to provinces under NFC award
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Rs. 1 trillion allocated for federal development projects
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Rs. 8.5 trillion set aside for debt servicing
Major Development Projects:
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Electricity upgrades for 15,352 villages
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Addition of 2,800 MW to power grid (including 2,633 MW solar)
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Progress on ML-1 railway and Karachi Circular Railway projects
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Establishment of high-performance sports academies
Tax Reforms Breakdown:
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Super tax reduced for businesses (0.5%-4% based on profits)
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Penalties for sales tax evasion increased tenfold (Rs. 500,000 to Rs. 5 million)
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Duties reduced on 3,500+ imported items
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Rs. 1.186 trillion allocated for subsidies
The 2025-26 federal budget represents Pakistan's most aggressive push yet to expand the tax net and meet IMF requirements. By doubling the cash withdrawal tax and imposing harsh restrictions, the government hopes to force more citizens into the tax system.
As the budget goes before parliament today, questions remain about how these measures will affect ordinary Pakistanis already struggling with high inflation. One thing is clear - the era of cash-based transactions and tax avoidance is coming to an end.
