ISLAMABAD: The federal government is proposing a range of broad tax reforms in the upcoming FY2025-26 budget, with a particular emphasis on increasing the tax burden on bank savings and gasoline-powered automobiles.
According to officials acquainted with the situation, the government is anticipated to propose a higher withholding tax on cash withdrawals made by non-filers.
The current rate of 0.6% could be raised to 1.2%, with an extra fee likely to apply on daily withdrawals exceeding Rs50,000.
According to sources, the move is intended to broaden the revenue base while discouraging unauthorized cash transactions. Taxation on profit-generating vehicles, such as bank deposits and savings plans, is also being reviewed.
A higher tax rate on capital gains and earnings is being proposed to bolster government revenue, which is nonetheless under strain due to a slowing economy and IMF commitments.
In addition, an 18 percent general sales tax (GST) is proposed for e-commerce transactions, up from the present lower slab, bringing digital platforms into the conventional sales tax regime for the first time.
