New taxation measures announced

ISLAMABAD: Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial Sunday announced new taxation measures of Rs 36 billion to narrow down financial gap on account of reduction in sales tax from 18 percent to 10 percent on solar panels and proposed increase in salary for government employees.

FBR Chairman presented these additional taxation measures before the National Assembly Standing Committee on Finance on Sunday.

FBR Chairman highlighted that the measures have been proposed to fill the financial gap for 2025-26.

Over Rs623bn new taxes unveiled

National Assembly Standing Committee on Finance approved following three new taxation measures:

(i); Federal Excise Duty of 10 percent on Day old Chicks (DOC) of poultry sector.

(ii); Rate of tax increased from 25 percent to 29 percent on dividend received by a company from mutual fund deriving income from profit on debt.

(iii); Withholding tax has been increased from 15 to 20 percent on profit on government securities paid to any person (institutional investors) other than an individual.

The new taxation measures would be made part of the amendments in the Finance Bill (2025-26).

In budget (2025-26), the FBR has taken new taxation measures of Rs 312 billion and enforcement measures of Rs389 billion for 2025-26. Excluding Rs 8.5 billion due to decrease in sales tax on solar panels, the net revenue impact of taxation measures now stood at Rs 339.5 billion for next fiscal year.

National Assembly Standing Committee on Finance also approved Finance Bill (2025-26) with approval of certain recommendations of the Senate committee, as well as, recommendations of the NA Finance committee.

FBR Chairman informed the committee that there is a financial gap of around Rs 35-36 billion including Rs 12 billion due to increase in salary, Rs 8.5 billion on account of reduction in sales tax on solar panels. He said the federal government also added some amount for distribution of revenue to provinces under the NFC Award.

He said that the government has shared six new taxation measures with the International Monetary Fund (IMF). Out of these six measures, three have been approved by the IMF.

Earlier, Finance Committee was informed that a uniform tax rate of 10 percent would be applicable on imported raw cotton and local cotton. Both types of cotton would now be treated at par.

Copyright Business Recorder, 2025