𝐏𝐚𝐤𝐢𝐬𝐭𝐚𝐧 𝐅𝐞𝐝𝐞𝐫𝐚𝐥 𝐁𝐮𝐝𝐠𝐞𝐭 𝟐𝟎𝟐𝟓–𝟐𝟔: 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬 Sector Wise Key Points: BUDGET 2025–26 KEY FIGURES • GDP growth projected at 4.2% • Average inflation around 7.5% • Budget deficit at 3.9% of GDP; primary surplus at 2.4% • Tax collections target Rs. 14,131 billion (18.7% ↑); provincial share Rs. 5,147 billion • Non-tax revenue target Rs. 5,147 billion; federal net income Rs. 11,072 billion • Total expenditure Rs. 17,573 billion (Opex Rs. 16,286 billion; PSDP Rs. 1,000 billion for infrastructure, water & energy) • Defence Rs. 2,550 billion; Civil administration Rs. 971 billion; Pension Rs. 1,055 billion; Subsidies Rs. 1,186 billion; Grants Rs. 1,928 billion (incl. Rs. 716 billion for BISP) INCOME TAX MEASURES • Revised salary slabs: up to Rs. 600 k – no tax; up to Rs. 1.2 M – 1%; up to Rs. 2.2 M – 11%; up to Rs. 3.2 M – 23% • 1% reduction in surcharge on income over Rs. 10 M • 0.5% cut in super-tax for companies with taxable income between Rs. 200 M and Rs. 500 M • Property WHT rates cut: 4.5% → 2.5%; 3.5% → 2%; 3% & 2% → 1.5% • 7% FED on property transfers abolished • Tax credits for up to 10 Marla houses and 2,000 sq ft flats • Stamp duty in Islamabad slashed from 4% to 1% • Passive incomes (bank profits) taxed at 20%, exempting national savings & small investors • E-commerce platforms & courier services to deduct tax at source • Mutual funds taxed: 25% on money-market income; 15% on equity income • 5% tax on incomes over Rs. 10 M for pensioners above 70 years • Advance tax on cash withdrawals for non-filers raised from 0.6% to 1% • 50% expense disallowance if cash receipts exceed Rs. 200,000 per invoice • Rental income taxed at 4% of FMV • Appeals process overhauled; taxpayer data shared with educational & donor bodies • 7th Schedule of the Income Tax Ordinance, 2001 reformed • Cross-cheque mode expanded to online & digital transactions • Only filers (with returns & wealth statements) can buy property, vehicles or invest in certain instruments • FBR empowered to hire third-party auditors for tax-base expansion & enforcement • Digital Presence Law 2025 to tax online businesses without a PE in Pakistan SALES TAX ACT MEASURES • Imported & local solar panels taxed at standard 18% • Courier services to collect 18% sales tax on e-commerce sales • All vehicles taxed at standard 18% • Former tribal areas now under 10% sales tax (to be raised gradually) • Imported cotton yarn brought under sales tax • Penalties for unregistered persons: bank freezes, property-transfer bans, asset seizures • Automated, risk-based input-tax adjustments FED & CUSTOMS MEASURES • Enforcement via track-and-trace if original tax stamps or barcodes are missing • Customs reforms to fast-track pre-arrival clearance, cut clearing time and reduce litigation.