Pakistan to 'introduce' new taxes up to Rs700bln in budget 2025-26

Pakistan government is expected to introduce new taxes worth up to Rs700 bln in the budget 2025-26, to be presented later in the day, ARY News reported.

As per details, the government is expected to increase the overall tax target to Rs2 trillion and in this context new taxes worth Rs600 to 700 billion are likely to be imposed, while the Federal Board of Revenue (FBR) aims to collect Rs 1,200 billion through its own tax initiatives.

Despite the additional tax measures, the budget 2025-26 may also include tax relief worth Rs200 billion.

Among the proposed measures is a 2% increase in the General Sales Tax (GST) on cash transactions.

Under the proposal, shopping with Automated Teller Machines (ATMs) or credit cards would be taxed at the standard 18% General Sales Tax (GST) rate, while cash purchases would attract a higher GST rate of 20%.

Additionally, consumers using cash to purchase petrol or diesel may have to pay an extra Rs2 per litre, as part of the proposed fiscal adjustments.

The budget 2025-26 will be presented today in the National Assembly by Finance Minister, Muhammad Aurangzeb.

Federal government has set GDP growth target at 4.2 per cent in the budget 2025-26.

According to details, the current account deficit for the next fiscal year is projected at 2.1 billion dollars, which equals -0.5% of GDP.

The revised National Development Plan allocates over Rs4,223 billion for various development initiatives across the country.

Of this amount, Rs2,869 billion is earmarked for the PSDP, while federal ministries and divisions will receive over Rs682 billion for their respective development projects.