The federal government is expected to present the 2025–26 budget today, with early reports indicating significant changes in taxation aimed at boosting revenue by around Rs2,000 billion. The upcoming fiscal plan is likely to introduce new taxes across several sectors, while also adjusting existing duties.
One of the key proposals under review involves raising the General Sales Tax (GST) on locally manufactured vehicles up to 850cc—from 12.5% to 18%. If implemented, this move could push up the prices of popular small cars, including Suzuki Alto, WagonR, and Kia Picanto.
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Officials have also hinted at new taxes on bakery items, fertilizers, and pesticides, potentially making daily essentials and agricultural inputs more costly for consumers and farmers alike.
In a contrasting move, the budget may lower taxes on cigarettes and sugary drinks, which could result in a drop in prices for these products. The possibility of such changes has sparked debate over health priorities and fiscal strategy.
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The property sector is also under the spotlight, with suggestions that the Federal Excise Duty might be removed, though a hike in Capital Gains Tax is reportedly being considered.
To expand the tax base, authorities are planning to bring income from digital platforms, including social media and freelancing, under the tax net. Additional levies on overseas earnings through such channels are part of the proposed changes.
