Preparations have been finalised to expand the tax net and withdraw various exemptions, in line with International Monetary Fund (IMF) recommendations in the upcoming budget 2025–26.
According to details surfaced on Monday, the government was considering imposing taxes on agricultural income, digital platforms and earnings from freelancing. Proposals had also included abolishing Federal Excise Duty on property transactions and reducing taxes on beverages and cigarettes.
Meanwhile, salaried individuals may receive limited relief. Suggestions under review included a 10% relief for salaried workers, a 5% to 7.5% increase in pensions and a 30% allowance for employees in grades 1 to 16.
The possibility of merging the ad-hoc relief allowance into the basic salary was also being considered.
The IMF was reportedly pressing for taxation on fertilisers, pesticides and bakery items. Additionally, the government was proposing to end the existing tax exemption for the former FATA region and introduce a 12% tax there. An increase in the Capital Gains Tax on shares and property is also under consideration.
The IMF had emphasised the need to formalise the economy and curb tax evasion as part of broader fiscal reforms.
