Finance Minister Muhammad Aurangzeb announced fresh tax measures in the National Assembly during his budget speech for FY2025-26. He introduced a 29% tax on income from the debt portion of mutual funds for companies. He also proposed a 20% tax on profits earned by corporations through government securities. Additionally, the poultry sector will now face a Rs10 Federal Excise Duty on each day-old chick to increase sector contribution to the national revenue.
Moreover, Aurangzeb confirmed tax relief for the salaried class and changes in pension tax rules. People earning between Rs600,000 and Rs1.2 million annually will now pay just 1% tax. Pensioners earning over Rs10 million will be taxed, but those above 75 years old will remain tax-exempt. The General Sales Tax on imported solar panels has been reduced from 18% to 10% to promote clean energy use.
The government also announced steps to improve tax compliance and control FBR powers. Offences involving up to Rs50 million will now need a court warrant for arrests. Also, a three-member FBR committee must approve arrests, which must be reported to a special judge within 24 hours. These changes aim to ensure transparency and protect citizens from abuse.
In the real estate sector, a new law under Section 114C targets financial transactions beyond declared income. However, exemptions apply for residential plots under Rs50 million and commercial properties under Rs100 million. Similarly, vehicles costing up to Rs7 million are exempt. This move is intended to stop illegal wealth parking while protecting middle-class buyers.
Aurangzeb shared upcoming plans including a 20-year loan scheme for low-income housing and Pakistan’s first Skill Impact Bond with the British Asian Trust. He added that only already-approved dam projects will proceed. The finance minister also warned that regional tensions, especially between Iran and Israel, could affect the economy, but assured the government is ready for any outcome.