ISLAMABAD :Pakistan has rolled out the Finance Act 2025, triggering a sweeping shift in its fiscal policy with the enforcement of PKR 312 billion in fresh taxes and PKR 389 billion in enforcement initiatives aimed at tightening compliance and expanding the tax base.
The Act empowers the Federal Board of Revenue (FBR) with enhanced legal oversight, allowing it to track commercial transactions and enforce registration protocols across digital and offline businesses.
Highlights of the tax reforms include:
Mutual funds now face a 29% tax, up from 25%
A 10% sales tax on the sale and import of solar panels, a controversial move amid rising energy costs
Mandatory FBR registration for all e-commerce and online ventures
New income tax brackets have been introduced for salaried employees, with broader withdrawals of tax exemptions, signaling a shift toward stricter fiscal discipline.
Additionally, the Act introduces:
Carbon levies on petroleum products
Custom duties on hybrid car parts and other imports
Regulations on banking activity, limiting large withdrawals from unregistered or simple accounts
Crackdowns on major non-compliant retailers, including property seizures and forced closures
On a positive note, the government has slashed duties on various industrial inputs, aiming to stimulate local manufacturing and reduce overall production costs.
These measures reflect a calibrated attempt to balance fiscal consolidation with industrial growth, while also aligning with IMF recommendations and global economic standards.
