The new fiscal year 2025-26 has officially begun, and the Finance Bill 2025-26 has been implemented from today, introducing several major tax reforms and adjustments.
According to the new regulations, citizens outside the tax net will now only be allowed to maintain basic bank accounts and will face restrictions on the amount of money they can withdraw. Non-filers will be permitted limited cash withdrawals from their accounts.
The Federal Board of Revenue (FBR) has also announced strict action against large retailers who are not registered for sales tax. New taxes on various items, including solar panels, have come into effect from today. However, there is some relief for salaried individuals, as income tax rates for this segment have been reduced.
The FBR has set a tax collection target of Rs. 14,131 billion for the new fiscal year. Additionally, a Climate Support Levy of Rs. 2.50 per liter will now apply to petroleum products and vehicles. A 10% sales tax has been imposed on the import of solar panels, while a 4% duty is now applicable on hybrid car parts, and a 15% duty has been levied on agricultural tractors.
Customs duty at the rate of 10% has also been imposed on eye drops, eye medications, and glucose products.
Key Highlights of the Finance Bill:
- No income tax on employees earning up to Rs. 50,000 per month.
- Employees earning up to Rs. 100,000 per month will pay only 1% income tax.
- Pensioners receiving more than Rs. 850,000 per month will now be subject to income tax.
- FBR certificate is now mandatory for purchasing property worth over Rs. 50 million and vehicles priced above Rs. 7 million.
- Businesses not registered for sales tax may face sealing or property confiscation.
- 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.
