ISLAMABAD: The government is considering several tax proposals for the upcoming federal budget 2025-26, including strict measures for non-filers and increased taxes on vehicles and income from savings.
According to Federal Board of Revenue (FBR) sources, work is underway on various tax proposals. One major suggestion is to increase the withholding tax rate for non-filers from the current 0.6% to 1.2%. Additionally, a daily cash withdrawal of over Rs50,000 by non-filers may face extra tax.
There are also plans to raise the sales tax on locally assembled vehicles below 850cc, increasing it from 12.5% to 18%. The budget may also include a new levy on petrol and diesel-powered vehicles.
Sources further said that tax hikes are being considered on bank deposits, profit from savings schemes, capital gains, and dividends. However, there is a possibility that the rate of super tax could be reduced.
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In another development, the FBR is reviewing a proposal to increase the tax by 2% on income earned from interest on commercial bank accounts and government savings schemes. This move is part of an effort to provide relief to salaried and other sectors with the approval of the International Monetary Fund (IMF).
A senior official said that while the IMF has not yet given final approval to these proposals, it has asked for full details on the new tax plans. The Fund wants assurance that any relief given will be offset by increased revenue elsewhere.
Tax collection fell short during the current IMF programme due to a shrinking formal sector and high tax rates imposed in the previous budget for fiscal year 2024-25.
