The federal government has officially enforced the Finance Bill 2025 from today (Tuesday), introducing Rs312 billion in new taxes and Rs389 billion in enforcement measures aimed at expanding the tax net in Pakistan.
For a detailed look at specific tax relief measures introduced in the budget, read here.
According to the bill, the Federal Board of Revenue (FBR) has gained significant enforcement powers, including tracking transactions via registered CNICs. One of the major highlights of the Finance Bill 2025 is the increase in tax on mutual fund investments, which has gone up from 25% to 29%, and the imposition of a 10% sales tax on solar panels, impacting the renewable energy sector.
The decision to impose sales tax on solar panels has sparked debate across the renewable energy sector—full story here.
Additionally, a carbon levy has been applied on petroleum products, and the government is now allowed to increase the Petroleum Development Levy (PDL) up to Rs90 per liter. The new income tax slabs for 2025 have also taken effect, with salaried individuals seeing changes in their monthly deductions.
Investors in T-bills and Pakistan Investment Bonds will now face new taxes, while e-commerce and online business operators are required to register with FBR. Meanwhile, e-commerce associations have voiced concerns, urging the government to reconsider the mandatory registration move—read more.
The Finance Bill 2025 also includes mandatory FBR certification for property purchases above Rs50 million and vehicles costing over Rs7 million.
In a move to formalize the retail sector, unregistered large retailers may have their businesses sealed or properties confiscated. Citizens outside the tax system in Pakistan can now only operate basic bank accounts with withdrawal limits. Arrests may be made for tax fraud exceeding Rs50 million, pending approval from a designated committee.
The bill also introduces a tiered customs duty structure on 122 goods in border markets, divided into:
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Category 1: 5% customs duty
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Category 2: 10% customs duty
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Category 3: 20% customs duty
To encourage manufacturing, the government has removed customs duty on textile machinery imports, and on pharmaceutical raw materials used in the production of medicines including cancer and hepatitis B treatments and vaccines.
These measures under the Finance Bill 2025 are expected to broaden the tax base, improve compliance, and promote economic transparency.
A broader breakdown of the FY25 federal budget announcements can be found here.
For those interested in reviewing the official document, the full text of the Finance Bill 2025 can be accessed here via FBR.
