WEBDESK: The federal government is preparing to announce Budget 2025-26, which is expected to introduce strict tax measures targeting income tax non-filers. As part of broader reforms aimed at increasing revenue and meeting IMF demands, the new budget proposes to remove the “non-filer” status completely and replace it with stronger enforcement tactics.
As part of the new improvements, the Federal Board of Revenue (FBR) is suggesting a tenfold increase in fines, through Point of Sale (POS) systems, for tax fraud, increasing penalties to PKR 5 million from PKR 500,000.
In the Pakistan Budget 2025-26, non-filers’ tax reforms will have strict financial barriers. Limitations would include a ban on buying vehicles and real estate, restrictions on stock market investments and mutual funds, and they will not be able to conduct large-scale financial transactions.
Additionally, non-filers will not be able to travel abroad, except for religious pilgrimages. The withholding tax on cash withdrawals that exceed PKR 50,000 will be increased from 0.6% to 1.2%.
The Pakistan Budget also suggests wider tax reforms to enhance the tax net and improve tax collection.
However, contrary to previous discussions, mobile phone SIMs and internet devices will not be blocked.
The goal of these new measures is to push more people into the tax net. Pakistan has long struggled with low tax compliance, with only a small portion of the population regularly filing returns. The Budget 2025-26 aims to change that by making it difficult for non-filers to function normally in the economy.
Budget 2025-26 to be announced on June 10
Pakistan’s Federal Budget 2025–26 will be announced on June 10, with a total size of around Rs17.6 trillion. The government plans to collect Rs14.13 trillion in taxes through the FBR. A large portion of the budget about Rs6.2 trillion will go toward paying interest on loans. The development budget (PSDP) may be reduced to around Rs1 trillion, with money going to projects like water and energy.
Government employees could get a 10% salary increase, while pensions may rise by up to 7.5%. More funds are being given to education, health, and IT. Economic growth is expected to be 2.7% this year, but the government hopes to reach 4.2% next year. Inflation has fallen to 4.6%, and the country is following IMF guidelines to keep the economy stable. The budget focuses on balancing debt, defence, and development.
People in Pakistan who are working on salaries are hoping for reduced taxes on the salaried class. The taxes on the salaried class were increased in the previous budget.
