Latest news with #Rs500-600
Business Recorder
22-05-2025
- Business
- Business Recorder
Budget 2025-26: Pakistan govt likely to bring YouTubers, freelancers into tax net
Pakistan government is projected to impose new taxes including on the income of freelancers, vloggers, and YouTubers, aiming to raise additional taxes worth around Rs500-600 billion in the upcoming budget for the financial year 2025-26, according to a research report issued on Thursday. In its report titled 'Pakistan Federal Budget FY26 Preview', Topline Research said the government was expected to give a revenue collection target of Rs14.1-14.3 trillion to the Federal Board of Revenue (FBR), showing a year-on-year growth of 16-18% in tax collection in FY26 compared to FY25. Out of this required 16-18% growth, 12% would be achieved through autonomous growth driven by real gross domestic product (GDP) growth of 3.6% and inflation of 7.7%. 'The remaining 4-5% growth translates into additional tax measures of Rs500-600 billion,' the report estimated. The budget presentation for FY26 is scheduled for June 2, 2025. Various institutions have recommended government for taxing income from social media platforms like YouTube, Tiktok amongst others. The initial proposal by the Institute of Cost and Management Accountants of Pakistan (ICMAP) was to implement tax rate of 3.5% on social media income. The institute expects additional collection of Rs52.5 billion (from social platforms), the report mentioned. Tax on pensioners Besides, the government is contemplating to impose a tax rate on pensioners in range of 2.5-5% on monthly pension of over Rs400,000 per month, the report said, citing media reports. Last year, the government also tried to consider taxing this area. 'However, we believe, in FY26 budget government will impose a tax, aiming to raise Rs20-40 billion from this.' In the first nine month of the ongoing fiscal year 2024-25, Pakistan has already spent Rs673 billion on pension cost, annualising to Rs0.9-1 trillion, the report said. The Pakistan Bureau of Statistics (PBS) has already adapted a key measure wherein GST (general sales tax) on few commodities would be calculated based on the prices published by it. For example, in case of sugar, the GST was being calculated on Rs72.22 per kg while the market price surged to Rs150/kg. This change in base for GST calculation can fetch additional Rs70-80 billion annually. 'We expect this change to be incorporated in FY26 finance bill.' Tax on ultra processed food items (health tax) is widely being circulated to 'bring health awareness and to reduce prevalence of obesity, type 2 diabetes, stroke, dental caries, cardiovascular disease and blood pressure'. As a first step, the government is planning to increase FED (federal excise duty) on such items (like biscuits snacks) by 20% with objective to take total FED to 50% by FY29. 'We expect government to impose this tax in addition to increase in FED on cigarettes as well.' The government has informed the International Monetary Fund (IMF) regarding removal of non-filer category. It has submitted a bill to the parliament, which if approved will restrict non-filers from engaging in key economic transactions such as vehicles and real estate purchase, according to the report. The bill was taken under discussion by Senate committee and there were some technological changes required in FBR system to effectively implement this. 'We believe, this section 114C would be introduced in budget, however, after the debate, some changes in threshold levels or some relaxation in year 1 of its implementation cannot be ruled out.' The government has also informed the IMF to considering imposing petroleum development levy (PDL) on furnace oil (FO) in addition to the levy already collected on petrol and diesel, Topline Research said. Furthermore, the government also plans to increase PDL by Rs5/liter on petrol and diesel (HSD) in form of carbon tax to be implemented gradually in 2 years. 'If this is implemented, we believe government can collect additional Rs35-80 billion from PDL on FO sales assuming no changes on GST front and PDL imposed is in range of Rs40-78/liter.' 'IMF has assigned to collect a minimum Rs295 billion from retailers in the first half of FY26 (till Dec 2025) and has also added this as Indicative Target. We believe, government will take steps like increase in advance taxes on distributors etc to satisfy this IMF requirement,' the report said. In October 2024, IMF report mentioned some tax measures for Pakistan including increase in FED by 5% on fertiliser and pesticide. 'With this step, government can raise incremental amount of over Rs30 billion it estimated. 'In our view, likelihood of increase in FED on both the products is high since this is IMF requirement.' Among other tax measures, elimination of concessionary or reduced GST rate on remaining products is 'highly likely', removal of exemptions for FATA/PATA region is likely, implementation of agriculture income tax is likely by provincial governments, and increase in GST on luxury items like appliances aircraft, ships, jewellery, cosmetics, cigarettes, high-end mobile phones is also expected in FY26 budget. In addition to this, the government is considering giving tax relieves to salaried people and real estate sector, reduce duties on import of vehicles or relaxation of age limit from 3 years to 5 years, and announce subsidy on housing finance, the report said.
Express Tribune
14-05-2025
- Politics
- Express Tribune
Rs40b scandal exposes gaps in govt depts
The largest financial scandal in Khyber-Pakhtunkhwa's history — amounting to a staggering Rs40 billionhas left government departments reeling, as they failed to provide satisfactory answers before the Public Accounts Committee (PAC) of the K-P Assembly. Departments including Finance, Accountant General's Office, and Communication & Works (C&W) were unable to present complete documentation or convince committee members of their performance regarding embezzlement in Upper Kohistan. During the high-level meeting chaired by Assembly Speaker Babar Saleem Swati, department representatives mostly shifted blame onto each other. The speaker criticized the departments for their poor coordination, emphasizing that this is not just a Rs40 billion scandal, but likely part of a broader corruption network potentially reaching Rs500-600 billion. In contrast, the National Accountability Bureau (NAB) earned praise for recovering Rs20 billion from the misappropriated funds. Speaker Swati highlighted this as a rare case where no political figures are implicated, and said the scandal involves deep-rooted institutional corruption, especially within the AG Office, Finance Department, and C&W. Despite the magnitude of the corruption, only two officials were suspended initially. The PAC ordered the suspension of additional officials across the involved departments. The AG's office was instructed to suspend two more officers within three days and initiate further action. Finance and C&W were also directed to identify and penalize more employees. The AG claimed NAB had taken all records related to Upper Kohistan and had not returned them. However, NAB clarified that it only takes copies of documents, not originals. The Speaker reprimanded the AG for overstepping boundaries and insisted the office should have maintained copies. The C&W Secretary revealed that an internal inquiry had led to the suspension of seven officials, but the PAC demanded all SDOs and XENs from 2019 to 2024 be suspended. The Speaker added that even check signatories must be held accountable. Contractors operating under fake companies are to be blacklisted, along with their beneficiaries. DG Audit Sirajul Haq informed the committee that over Rs21 billion in irregularities were detected last year alone, and more discrepancies worth Rs6 billion were found in 18 districts. He stressed the need to audit a full decade's worth of records from Kohistan, promising a complete report by December. A heated exchange also erupted between PPP MPA Ahmad Karim Kundi and Finance Advisor Muzzammil Aslam, with Kundi demanding Aslam's resignation. Aslam denied any involvement in the scandal, asserting his department's innocence. The session concluded with warnings that no department or officer would be spared accountability. Speaker Swati summed up the sentiment: "This isn't just theftit's systematic institutional failure."
Business Recorder
10-05-2025
- Business
- Business Recorder
Federal budget 2025-26: Cut in taxation rates for salaried people likely
ISLAMABAD: The revenue impact of the taxation measures to be taken in the coming budget 2025-26 would be neutralised through tax relief measures including at least 2.5 percent reduction in income tax slabs for salaried individuals and reduction in withholding tax rates and corporate income tax rate. Sources told Business Recorder here on Friday that if the government proposes taxation measures of Rs500-600 billion, the net impact of the revenue measures should be minimised through tax relief measures. The government will try to cover the revenue impact of the taxation measures with the relief measures in the coming budget. Ministry seeks Rs1.6trn PSDP: FY26 budget on June 2 However, the government is also exploring other avenues to overcome shortfall as a result of relief to salaried class etc. 'If revenue measures are with the tax relief measures, there might be zero net revenue impact of overall measures for next fiscal year,' the official quoted an example. Sources said that the revenue collection from the salaried class is much high as compared to projected revenue during the outgoing fiscal year. Therefore, the government is committed to reduce tax by 2.5 percent in each higher slab of salaried individuals. In this regard, working is underway. Another proposal is to reduce corporate tax rate as well as 'Super Tax' in the upcoming budget. The proposal is to raise the income tax exemption threshold from Rs0.6 million up to Rs1 million under the Income Tax Ordinance, 2001. This is a relief measure for the general public to considerably enhance exemption threshold of income tax, the sources added. Copyright Business Recorder, 2025
