The Government of Pakistan has introduced three new tax proposals to generate Rs. 36 billion in revenue. This move is aimed at covering the financial impact of the recently announced 10% salary increase for government employees and the reduction in GST on solar panels.
These measures also align with the fiscal targets agreed upon with the IMF for the 2025–26 budget.
The new taxes will be added to the revised Finance Bill 2025–26 during its final approval stage in Parliament.
One key proposal includes a 10% Federal Excise Duty (FED) on Day-Old Chicks (DOC) in the poultry sector. This may raise poultry production costs, potentially affecting market prices and small farmers.
Another measure is an increase in the tax rate on dividends earned by companies from mutual funds that generate income through profit on debt. The current rate of 25% will be raised to 29%.
Additionally, the government aims to increase the withholding tax on profits from government securities for institutional investors from 15% to 20%. This increase, however, will not affect individual investors.
Officials say these tax changes are carefully designed to reduce the financial burden on the general public while ensuring the country meets its budget goals.
By introducing these steps, the government hopes to maintain economic discipline, meet IMF expectations, and keep development programs on track without excessive borrowing or cuts in public services.
