The Federal Board of Revenue (FBR) is considering increasing withholding taxes on online buying and selling platforms as part of the FY2025–26 budget proposals. The initiative aims to boost tax revenue and expand the tax base in line with International Monetary Fund (IMF) requirements.

Sources reveal that the FBR will present these proposals during upcoming negotiations with the IMF team, which will begin discussions on fiscal reforms tomorrow. Among the key recommendations is a potential increase in the 0.25 percent withholding tax applied to digital marketplace transactions on platforms like Daraz, OLX, Zameen, and PakWheels.

Additional Fiscal Reforms in Consideration

The government is also weighing several major tax policy shifts, including:
✅ Phased removal of the 10 percent super tax on large corporations to restore investor confidence.
✅ Raising the monthly tax-free income threshold from Rs. 50,000 to Rs. 80,000, exempting incomes up to Rs. 960,000 annually.
✅ Potential elimination of the 10 percent surcharge on individuals earning over Rs. 10 million monthly.
✅ A controversial 5 percent tax on pensioners, sparking concerns among retired officials.
✅ Tax relief for manufacturers and the real estate sector, including removal of withholding taxes on raw material imports and reductions in property transaction taxes.
✅ Duty adjustments for vehicles, with possible relief for imported cars while locally assembled vehicles above 1300cc may face higher taxes.

Despite these proposed measures, government officials acknowledge that meeting the Rs. 12.3 trillion revenue target will require aggressive reforms, focusing on digital compliance and sustainable fiscal policies.