Islamabad: In a significant policy adjustment, the federal government has relaxed restrictions on asset purchases by non-filers under the Budget 2025‑26, following directives from Prime Minister Shehbaz Sharif.
According to Finance Minister Senator Muhammad Aurangzeb, individuals who have not filed income tax returns can now acquire residential property valued up to PKR 50 million, commercial property or plots up to PKR 100 million, and motor vehicles with prices up to PKR 7 million without facing prohibition.
The minister further outlined new tax relief initiatives aimed at bolstering economic stability and public confidence. Income tax rates for salaried individuals earning between PKR 600,000 and PKR 1.2 million were reduced from a proposed 2.5% to 1%. Additionally, no tax will be imposed on pension commutation or gratuity, with pensions exceeding PKR 10 million taxable and individuals over 75 fully exempted.
Capital gains tax will not apply to properties sold after six years of acquisition, provided they were bought before July 1, 2024 — a rule that continues unchanged under the new budget. Point-of-sale withholding tax rates of 4.5% to 6% remain but are generally refundable upon filing returns. Exemption from withholding tax will apply to personally used properties held for 15 years or more.
The government also revised the earlier plan to impose an 18% sales tax on imported solar panel components, lowering it to 10%, affecting only 46% of imported items—resulting in an estimated 4.6% effective increase in final pricing.
To prevent profiteering, the minister warned against hoarding and artificial inflation of solar equipment prices, pledging strict enforcement actions in collaboration with provincial authorities.
Addressing FBR enforcement powers, Aurangzeb announced that arrests related to evasion cases above PKR 50 million will now require three prior notices, evidence of intent to evade, and approval from a three-member FBR committee. Additionally, any arrest must be backed by a court warrant and followed by presentation before a judge within 24 hours.
Beyond tax reliefs, the finance minister unveiled initiatives to stimulate key economic sectors. A sales tax on imported raw cotton and yarn will be introduced to protect local producers from price discrepancies. Export-oriented industries remain largely exempt from new taxes to preserve Pakistan’s global competitiveness.
Other notable measures include:
A PKR 10 tax on each broiler chick to capture revenue from the poultry sector.
Expansion of the Benazir Income Support Programme budget from PKR 592 billion to PKR 716 billion to support ten million low-income families.
Introduction of collateral-free loans of up to PKR 1 million for farmers owning up to 12.5 acres, including provisions for seeds, fertilizers, diesel, and insurance.
A digital warehouse receipt system to help farmers access better pricing.
New programs to support women entrepreneurs and low-income homebuyers, including 20-year low-cost housing loans and a Rs14 billion Women Inclusive Finance programme backed by the ADB.
The finance minister underscored that these measures were designed to reduce the burden on the lower and middle-income population while ensuring fair enforcement and expanding the tax base. He also noted the Finance Bill includes reforms across e-commerce, industrial policy, and energy to ensure sustainable fiscal growth.
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