The coalition govt approves Rs36 billion green-lit a new Finance Bill in fresh taxes, marking another step in efforts to plug budget deficits and align with IMF targets. Finance Minister and economic advisors emphasize that these measures are designed to offset an 8 percent cut in the proposed solar energy tax, preserving fiscal balance without drastically hiking existing rates.
One notable change involves introducing advance tax on vehicles, now calculated based on vehicle value rather than engine size. This could mean steeper levies for luxury car buyers, with rates escalating depending on the vehicle’s worth. Digital income is another new frontier—online earnings across freelancing or digital platforms will be subject to specific tax rules, a move reflecting the government’s push into the evolving digital economy.
Additionally, simple everyday items such as bakery products are now on the tax radar—expected to contribute to increased government coffers, though potentially triggering modest consumer price increases . Non-filer taxpayers face tougher penalties too: withholding tax (WHT) for wholesalers, retailers, and distributors jumps to 2.25 percent, while non-filers pay slab-based capital gains tax of 15–45 percent on securities and property.
Fuel prices won’t escape either. The Petroleum Development Levy sees hikes of Rs25–70 per litre across various fuel categories, from motor spirit and diesel to low-density oil products. Federal excise duties rise too: sugar now attracts a Rs15/kg duty, cement dutiable by Rs1/kg, and air passengers face added Rs7,500 to Rs100,000 depending on class and destination.
Repercussions are already visible on the Pakistan Stock Exchange, which dropped over 2,000 points on news of these proposed taxes. Investors, wary of tighter margins and costlier consumer spending, reacted swiftly .
While critics argue that regressive measures—like raising costs on bakery goods and fuel—hit ordinary households hardest, proponents maintain that without such measures, financing critical social and infrastructure projects becomes impossible. The question now is whether these taxes can be implemented smoothly or will face resistance from industry and civil society.
For businesses and consumers, the Finance Bill signals a more comprehensive taxation framework—targeting previously informal sectors like digital earnings and imposing broader levies on non-filers. Transparency and efficient revenue use will be key. If the government can follow through with judicious spending and clear communication, the measures might withstand public scrutiny. But missteps could exacerbate inflation risks and stir public dissatisfaction as Pakistan navigates a tenuous economic recovery.
