The new fiscal year commences: The Finance Bill 2025-26 is effective as of today.
The fiscal year 2025-26 has commenced, and the Finance Bill 2025-26 has been enacted today, instituting significant tax reforms and modifications.
Under the new regulations, citizens not within the tax net will be permitted to hold only basic bank accounts and will encounter limitations on their withdrawal amounts. Non-filers will be allowed restricted cash withdrawals from their accounts.
The Federal Board of Revenue (FBR) has announced stringent measures against large retailers who are unregistered for sales tax. New taxes on several items, including solar panels, have been implemented as of today. Nonetheless, salaried individuals will experience some alleviation, as income tax rates for this group have been diminished.
The FBR has established a tax collection target of Rs. 14,131 billion for the upcoming fiscal year. A Climate Support Levy of Rs. 2.50 per litre will now be imposed on petroleum products and vehicles. A 10% sales tax has been instituted on solar panel imports, a 4% duty is now applicable to hybrid car components, and a 15% duty has been imposed on agricultural tractors.
A customs duty of 10% has been levied on eye drops, ocular medications, and glucose products.
Principal Features of the Finance Bill: No income tax imposed on employees with monthly earnings up to Rs. 50,000.
Employees with a monthly income of up to Rs. 100,000 will incur a mere 1% income tax obligation.
Pensioners earning over Rs. 850,000 monthly will now incur income tax obligations.
FBR certificate is now mandatory for purchasing property worth over Rs. 50 million and vehicles priced above Rs. 7 million.
Unregistered businesses may encounter sealing or confiscation of property due to sales tax violations.
Tax fraud involving amounts exceeding Rs. 50 million may lead to arrest with committee approval.
Citizens outside the tax net can no longer open savings or current accounts, and their withdrawal limits will be strictly controlled.
The new finance bill also reclassifies 122 items sold in border markets into three categories with 5%, 10%, and 20% customs duties, respectively. However, the import of machinery for the textile sector will remain duty-free.
In a positive step for public health, customs duties have been abolished on cancer, hepatitis B medicines, vaccines, and 380 types of raw materials used in pharmaceutical production.
This comprehensive tax policy aims to broaden the tax base, regulate the informal economy, and increase revenue collection while providing selective relief to key sectors and low-income individuals.
