{"id":102434,"date":"2025-06-03T11:12:00","date_gmt":"2025-06-03T06:12:00","guid":{"rendered":"https:\/\/www.zameen.com\/news\/?p=102434"},"modified":"2025-06-02T12:18:39","modified_gmt":"2025-06-02T07:18:39","slug":"govt-mulls-2-tax-hike-on-interest-income","status":"publish","type":"post","link":"https:\/\/www.zameen.com\/news\/govt-mulls-2-tax-hike-on-interest-income.html","title":{"rendered":"FBR mulls 2% tax hike on interest income in Budget 2025-26"},"content":{"rendered":"\n<p>Islamabad: The Federal Board of Revenue (FBR) is considering raising the tax rate on interest income earned from deposits in commercial banks and saving schemes by 2 percent for both filers and non-filers in the upcoming 2025-26 budget. This move comes as part of efforts to secure relief for the salaried class and other sectors with the consent of the International Monetary Fund (IMF).<\/p>\n\n\n\n<p>Currently, the tax rate on interest income stands at 15 percent for filers and 35 percent for non-filers. The proposed increase aims to help bridge the emerging revenue gap caused by a shrinking formal sector and reduced tax collection following the imposition of high tax rates in the last fiscal year.<\/p>\n\n\n\n<p>Read:<a href=\"https:\/\/www.zameen.com\/news\/higher-tax-on-cash-withdrawals-by-non-filers.html\" target=\"_blank\" rel=\"noreferrer noopener\">FBR eyes higher tax on cash withdrawals to penalise non-filers<\/a><\/p>\n\n\n\n<p>A senior official from the FBR, speaking on condition of anonymity, told The News that the IMF has yet to approve the final proposal. The official noted, \u201cIt is one of the options to increase tax rates on passive income, as individuals and companies place money in commercial banks and saving schemes.\u201d<\/p>\n\n\n\n<p>Experts have expressed concerns over the proposed hike. Dr Muhammad Iqbal, former FBR Member Tax Policy, said the current 15 percent rate on interest income is already high, considering that the principal amount on which interest is earned has usually been taxed previously. He further explained that the 15 percent rate applies to interest income up to Rs5 million annually, with incomes beyond that subject to regular tax rates.<\/p>\n\n\n\n<p>\u201cIf this rate is increased, it will hurt those relying on interest from their savings, especially at a time when bank returns are falling due to policy rate cuts,\u201d Dr Iqbal said. He warned that higher taxes might discourage deposits, adversely affecting commercial banks. He also questioned the rationale behind taxing interest income at a rate different from dividends, which currently face a 15 percent tax rate.<\/p>\n\n\n\n<p>Read: <a href=\"https:\/\/www.zameen.com\/news\/fbr-plans-tax-hike-on-larger-vehicles.html\" target=\"_blank\" rel=\"noreferrer noopener\">FBR plans tax hike on larger vehicles to boost revenue<\/a><\/p>\n\n\n\n<p>Meanwhile, sectors such as tobacco and beverages have reported volume declines and have requested tax relief. The beverage industry proposed reducing the federal excise duty (FED) from 20 percent to 15 percent. The tobacco sector\u2019s contribution to tax revenue is expected to fall by Rs45 billion, from Rs292 billion in fiscal year 2023-24 to Rs247 billion in 2024-25.<\/p>\n\n\n\n<p>The government continues to seek a balance between providing relief to taxpayers and ensuring sufficient revenue collection to meet its fiscal targets in the face of IMF programme conditions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Islamabad: The Federal Board of Revenue (FBR) is considering raising the tax rate on interest income earned from deposits in commercial banks and saving schemes by 2 percent for both filers and non-filers in the upcoming 2025-26 budget. This move comes as part of efforts to secure relief for the salaried class and other sectors with the consent of the International Monetary Fund (IMF). Currently, the tax rate on interest income stands at 15 percent for filers and 35 percent for non-filers. The proposed increase aims to help bridge the emerging revenue gap caused by a shrinking formal sector and reduced tax collection following the imposition of high tax rates in the last fiscal year. Read:FBR eyes higher tax on cash withdrawals to penalise non-filers A senior official from the FBR, speaking on condition of anonymity, told The News that the IMF has yet to approve the final proposal. The official noted, \u201cIt is one of the options to increase tax rates on passive income, as individuals and companies place money in commercial banks and saving schemes.\u201d Experts have expressed concerns over the proposed hike. Dr Muhammad Iqbal, former FBR Member Tax Policy, said the current 15 percent rate on&hellip;<\/p>\n","protected":false},"author":18,"featured_media":99068,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15015],"tags":[65074,65076,62476,23820,3362,6541,11728,65075,6358,61416,65073,65072,59014,64507],"persona":[],"class_list":{"0":"post-102434","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-legal-taxation","8":"tag-bank-deposits","9":"tag-beverage-industry","10":"tag-budget-2025-26","11":"tag-commercial-banks","12":"tag-fbr","13":"tag-filers","14":"tag-imf","15":"tag-interest-income","16":"tag-non-filers","17":"tag-pakistan-tax-policy","18":"tag-passive-income-tax","19":"tag-tax-hike","20":"tag-tax-revenue","21":"tag-tobacco-sector","22":"cat-15015-id"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Govt mulls 2% tax hike on interest income - Zameen News<\/title>\n<meta name=\"description\" content=\"Currently, the tax rate on interest income stands at 15 percent for filers and 35 percent for non-filers. The proposed increase aims...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.zameen.com\/news\/govt-mulls-2-tax-hike-on-interest-income.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Govt mulls 2% tax hike on interest income - Zameen News\" \/>\n<meta property=\"og:description\" content=\"Currently, the tax rate on interest income stands at 15 percent for filers and 35 percent for non-filers. The proposed increase aims...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.zameen.com\/news\/govt-mulls-2-tax-hike-on-interest-income.html\" \/>\n<meta property=\"og:site_name\" content=\"Pakistan Real Estate News &amp; Pakistan Property News &amp; Latest Updates - Zameen News\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/ZameenPK\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-03T06:12:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/news-cdn.zameen.com\/wp-content\/uploads\/2024\/09\/FBR_news-cover.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1170\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Samra Zulfiqar\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ZameenProperty\" \/>\n<meta name=\"twitter:site\" content=\"@ZameenProperty\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Samra Zulfiqar\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Govt mulls 2% tax hike on interest income - Zameen News","description":"Currently, the tax rate on interest income stands at 15 percent for filers and 35 percent for non-filers. 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