KARACHI – Sigh of relief for Pakistanis as withholding tax has been removed for homeowners living in same premises for 15-Year in the Amended Finance Bill 2025-26.
Sharif led government made major revisions to Finance Bill 2025-26, introducing host of tax-related reforms, including abolition of the withholding tax on immovable property for individuals who resided in the property for at least 15 years.
Federal Board of Revenue (FBR) implemented change after recommendation of National Assembly Standing Committee on Finance. The revised bill, set to take effect from July 1, 2025, aims to offer relief to long-term homeowners and streamline federal tax regulations.
In another major move, the bill incorporates all Senate-backed proposals regarding safeguards before arresting individuals involved in alleged tax fraud. These reforms are in line with the Supreme Court’s decision in the Taj Company case, prompting a complete restructuring of the sales tax law. The amendments aim to ensure due legal process in arresting and filing First Information Reports (FIRs) against tax offenders.
Pakistani government is also reviewing the controversial Energy Vehicles Adoption Levy. While the original plan included hybrid vehicles under the levy, discussions are ongoing to exempt them. Finance Committee has urged the FBR to exclude hybrid vehicles from the levy, arguing that certain categories have already been granted exemptions.
Finance Bill introduces Energy Vehicles Adoption Levy Act 2025, which will apply to all manufacturers, assemblers, suppliers, and importers of internal combustion engine vehicles. According to FBR Chairman, the levy is expected to generate Rs 10 billion in revenue. However, he emphasized that consultation with the International Monetary Fund (IMF) is required before any exemptions for hybrid vehicles can be finalized.
Meanwhile, government reversed proposed amendment related to customs duties on small international courier parcels. Originally, the FBR suggested removing the exemption from duty and taxes on parcels valued up to Rs 5,000. However, facing public concern, this proposal has been withdrawn. Instead, beginning July 1, 2025, only parcels or gifts worth up to Rs 1,000 will be exempt from taxes and duties.
Despite this revision, the National Assembly Standing Committee on Finance has outright rejected the FBR’s proposal, signaling ongoing debates between the government and policymakers over balancing revenue generation with public impact.
Senate committee approves proposal to raise property tax rate for non-filers to 500pc
