Govt Plans New Taxes on Pensions, Social Media Income in Budget 2025-26

The federal government is preparing to unveil several new tax measures in the upcoming Budget 2025-26, aiming to boost national revenue by an estimated Rs600 billion. These steps are expected to target pensioners, social media earners, processed goods, and non-filers, as part of a broader fiscal strategy being finalized in consultation with the International Monetary Fund (IMF).

One of the key proposals includes increasing the tax rate on monthly pensions exceeding Rs400,000 from 2.5% to 5%. According to Topline Securities, this adjustment could yield Rs20–40 billion in revenue. Similarly, income generated through platforms such as YouTube and TikTok may be subject to a new 3.5% tax, with projected earnings of Rs52.5 billion for the government.

The government also plans to align the General Sales Tax (GST) on various goods with actual market prices using data from the Pakistan Bureau of Statistics. Moreover, it is reviewing a 20% hike in federal excise duty on processed foods like snacks and biscuits. Cigarettes are also likely to see higher excise taxes.

To combat tax evasion, stricter actions are being considered against non-filers. “Under new proposals, those who fail to register themselves under tax net may face a lot of unwanted scenes, including purchase of vehicles and property.” Officials said that the government intends to remove the non-filer category from the tax code and use third-party data, including banking and commercial records, to track potential evaders.

A Compliance Risk Management System (CRMS) is being expanded to help identify individuals and businesses likely to avoid taxes. Despite limited success from the Tajir Dost Scheme, authorities have seen a 51% increase in tax filers within the trader and wholesale sectors following recent tax adjustments.

These measures, part of IMF-advised reforms, aim to improve fiscal discipline, broaden the tax base, and secure the next loan tranche amid global economic uncertainty.