Pakistan’s federal budget for 2025–2026 has dropped, and it’s making waves across the country. Whether you’re a salaried employee, a business owner, a car enthusiast, or an e-commerce shopper, this year’s budget has something that affects you.
One thing is loud and clear: the government is cracking down on non-filers and trying to expand the tax net. Here’s a breakdown of the most important tax updates explained simply.
Higher Tax on Cash Withdrawals for Non-Filers
If you’re not a tax filer, withdrawing cash just got more expensive.
The advance tax on bank cash withdrawals for non-filers has increased from 0.6% to 1%. That means for every Rs. 100,000 withdrawn, you’ll now pay Rs. 1,000 in tax a clear incentive to start filing returns and get yourself on the Active Taxpayers List (ATL).
18% Sales Tax on All Vehicles, Including Electric
Thinking of buying a car? Be prepared to pay more.
The government has slapped a flat 18% sales tax on:
- · Petrol vehicles
- · Diesel vehicles
- · Electric vehicles
Yes, even eco-friendly cars are no longer tax-free.
Additional 3% Tax on Luxury Cars
If your dream car has an engine bigger than 1800cc, you’ll now pay an additional 3% tax. This targets higher-end vehicles and is aimed at boosting revenue from wealthier buyers.
Non-Filers: No More Cars, Property, or Investments
Perhaps the most significant move in the budget is the proposed ban on non-filers from making large financial purchases.
If you’re not on the ATL, you could soon be barred from:
- · Buying cars
- · Purchasing property
- · Making investments (stocks, mutual funds, etc.)
This is a serious push to force compliance and documentation of income.
27.5% Tax on High Salaries
High earners, take note:
If your monthly salary is Rs. 333,000 or more, you’ll now fall under a 27.5% income tax bracket.
That’s a steep rise and it signals a clear effort to increase the contribution from upper-income groups.
E-Commerce Deliveries to Get Costlier
Online shoppers and sellers, watch out!
All deliveries made through e-commerce will be subject to an 18% sales tax charge under the new budget. This may result in higher product and shipping costs, particularly for small online businesses.
Relief for the Middle Class
On the brighter side, there’s some tax relief for mid-level salaried individuals.
If your annual salary falls between Rs. 600,000 and Rs. 1.2 million, your income tax rate has been reduced from 5% to just 1%. That’s a welcome move for many hardworking professionals struggling with inflation.
Final Thoughts: Compliance Is No Longer Optional
This year’s budget is a wake-up call: The FBR is serious about enforcement and if you’re still a non-filer, the financial system is quickly closing in around you. From higher transaction taxes to blocked access to cars and investments, the pressure is real. But there’s also a clear incentive: Become a filer and enjoy lower taxes, financial freedom, and legal protection.
Need help filing your return or understanding where you stand? Follow CORPTAX Solutions for expert guidance, updates, and simplified tax support tailored to you.