ISLAMABAD – The federal government is set to unveil the federal budget for fiscal year 2025-26 today with reports suggesting that it would impose new taxes to the tune of Rs2,000 billion.
Reports said a proposal is under consideration to increase the General Sales Tax (GST) rate on locally manufactured cars up to 850cc from 12.5 percent to 18pc.
If the proposal is approved, it would lead to a rise in prices of small vehicles such as Suzuki Alto, WagonR, Kia Picanto and others.
Similarly, proposals to impose taxes on bakery products, fertilizers, and pesticides are also under review, which could result in these items becoming more expensive.
On the other hand, the budget includes a proposal to reduce taxes on cigarettes and beverages, potentially making these products cheaper.
Important decisions regarding the property sector are also expected in the budget with reports suggesting that the Federal Excise Duty on property is likely to be revoked. An increase the Capital Gains Tax rate has also been recommended.
The government has finalized plans to widen the tax net by bringing income from social media and digital platforms under taxation. In particular, a proposal has been made to impose additional taxes on individuals earning from freelancing or social media platforms abroad.
Additionally, the budget may include a proposal to withdraw the tax exemption previously granted to the former FATA region, which could affect local business communities there.
