Islamabad: The Federal Board of Revenue (FBR) has briefed Finance Minister Muhammad Aurangzeb on a series of tax proposals under consideration for the upcoming federal budget, with particular focus on revising the General Sales Tax (GST) structure and tightening regulations for high-value property transactions.
One of the major proposals involves withdrawing the existing GST exemption on the import of solar panels. While a final decision is yet to be made, officials are considering imposing a reduced GST rate instead of the standard 18%. If the full rate is applied, it could significantly increase solar panel prices in the domestic market. This would mark a shift from the current tax incentives provided for renewable energy, which could affect ongoing efforts to promote solar adoption.
The government is also evaluating changes in the GST regime for other essential goods such as fertilizers, pesticides, and selected commodities, where reduced GST rates currently apply.
On the income tax side, the government is aiming to restrict property transactions above Rs10 million unless the buyer can demonstrate sufficient declared income and asset history. A key change proposed under Section 114C of the Income Tax Ordinance involves replacing the word “Board” with “Federal Government” in clause (1)(b), allowing the federal government to set value thresholds for such transactions.
This move is aimed at discouraging undocumented investments in real estate while protecting genuine buyers—especially those from the lower- and middle-income groups—who are purchasing their first or primary residential properties.
To assess eligibility, the government has defined “sufficient resources” as 130% of the cash and equivalent assets declared in income, wealth, or financial statements for the latest tax year. This includes cash, foreign currency, gold, stocks, bonds, and other cash-equivalent assets. Certain exemptions will apply for assets acquired through the exchange of previously declared capital assets.
The government also plans to incorporate tax measures introduced earlier through the Tax Laws Amendment Bill 2025 into the full Finance Bill 2025-26. These changes are part of a broader effort to expand the tax base and curb evasion in line with Pakistan’s fiscal reform commitments.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
