FBR Plans Higher Tax on Online Buying and Selling Platforms

The Federal Board of Revenue (FBR) has prepared different proposals, including raising withholding taxes on online platform buying and selling during the next fiscal year budget. Sources told ProPakistani that the FBR will present these proposals before the visiting International Monetary Fund team, which starts negotiations from tomorrow to finalize next year’s budget. Under proposals drafted by FBR for the FY2025–26 budget, the 0.25 per cent withholding tax on online platforms such as Daraz, OLX, Zameen, and PakWheels may be increased to boost collections and meet IMF demands for widening the tax base. The changes are part of a broader fiscal overhaul expected to be presented to Prime Minister Shehbaz Sharif on May 15, with the budget due on June 2. In a major shift to revive investor confidence, the FBR has also recommended a phased withdrawal of the 10 percent super tax on large corporations, which has pushed effective corporate rates in sectors like banking, cement, oil, and tobacco as high as 39 percent. Officials believe reversing the levy could unlock over Rs. 200 billion stuck in legal disputes. For the salaried class, the government is proposing to raise the monthly tax-free income threshold from Rs. 50,000 to Rs. 80,000, effectively exempting annual incomes up to Rs. 960,000. A separate 10 percent surcharge on high-net-worth individuals earning over Rs. 10 million monthly may also be scrapped. However, the relief package comes with trade-offs. A controversial proposal to impose a 5 percent income tax on pensioners is under consideration, raising alarm among retired public servants and union groups. The government is also exploring tax relief for manufacturers and the real estate sector, including the removal of withholding taxes on raw material imports and cuts in property transaction taxes. While imported vehicles may get duty relief, locally assembled cars with engines over 1300cc could see higher taxes. Despite these sweeping proposals, officials acknowledge that the Rs. 12.3 trillion revenue target remains out of reach without aggressive reforms. The IMF talks are expected to focus on credible steps toward fiscal consolidation, digital compliance, and sustainable revenue generation.