Govt Unveils Rs. 670 Billion in New Taxes With No Relief for Non-Filers

The federal government has presented the Finance Bill 2025 with Rs. 670 billion in gross revenue measures of which Rs. 281 billion is new taxes and Rs. 389 billion through enforcement. After Rs 58 billion in relief to salaried individuals, the net revenue gain is Rs. 623 billion. The Finance Bill imposes a complete ban on non-filers from buying vehicles, property, or securities. Non-filers will not be allowed to open or maintain savings accounts. Investor portfolio accounts are also banned for them. A 2 percent tax has been introduced on the digital supply of goods through online platforms. An 18 percent sales tax has been imposed on imported solar panels. The reduced 12.5 percent tax rate on locally assembled cars under 850cc has been withdrawn. Retail-packed imports such as pet food, chocolates, coffee, and cereal bars have been added to the Third Schedule of the Sales Tax Act, subject to tax on the printed retail price. The exemption on electricity supply to FATA/PATA is extended until June 30, 2026. Income and withholding tax exemptions for FATA/PATA are also extended by one year. Sales tax exemption for Special Economic Zones (SEZs) and Special Technology Zones (STZs) will now end by tax year 2035 or after 10 years, whichever is earlier. Withholding tax on cash withdrawals by non-filers is raised from 0.6 percent to 1 percent. Tax on specified services excluding IT/ITeS increased from 4 to 6 percent. A flat 15 percent tax is set on other services, including sports professionals. A new “Digital Transactions Proceeds Levy” is introduced for local sellers of online goods and services. Banks and couriers will act as withholding agents to enforce this. Tax on profit from debt is raised from 15 to 20 percent. Dividend tax is increased to 25 percent; dividends from mutual funds taxed at 15 percent. Pension income above Rs. 10 million for individuals under 70 will be taxed at 5 percent. Super tax under Section 4C is reduced by 0.5 percentage points for income slabs between Rs. 200 million and Rs. 500 million. For salaried individuals earning up to Rs. 3.2 million, tax rates and surcharge (cut from 10 to 9 percent) have been reduced. A 25 percent tax rebate for full-time teachers and researchers is restored from tax year 2023 to 2025. A proportional tax credit will be available on the profit on loans taken for homes up to 250 sq. ft or flats under 2,000 sq. ft. The definition of “e-commerce” is expanded. Online marketplaces will now be liable for tax on all digital or cash-on-delivery sales. Banks and payment gateways must collect 2 percent sales tax on digital payments; couriers must do the same on CoD. The Federal Board of Revenue did not hold its usual post-budget technical briefing for media persons.