The Federal Board of Revenue (FBR) has prepared different proposals, one of which includes raising withholding taxes on online buying and selling platforms during the next fiscal year’s budget.

Higher Tax on Online Buying and Selling Platforms

Sources say FBR will present these applications before the visiting International Monetary Fund team, which starts consultations tomorrow to conclude next year’s budget.

For the FY2025–26 budget, this proposal is drafted by FBR. On online platforms such as Daraz, OLX, Zameen, and PakWheel, a 0.2 per cent withholding tax is charged. This may be increased to increase collections and meet the IMF’s demands for broadening the tax base.

With the budget due on June 2, the changes are part of a broader fiscal renovate expected to be presented to Prime Minister Shehbaz Sharif on May 15.

In a major shift to recover investor confidence after imposing tax on online buying and selling platforms, the FBR has also recommended a phased withdrawal of the 10 percent super tax on large corporations, which has forced effective corporate rates in areas like banking, cement, oil, and tobacco as high as 39 percent. Officials believe withdrawing the charge could unlock over Rs. 200 billion stuck in legal differences.

For the salaried class person, the government is suggesting to increase the monthly tax-free income beginning from Rs. 50,000 to Rs. 80,000, effectively excusing annual incomes up to Rs. 960,000. A separate 10 percent addition on high-net-worth individuals earning over Rs. 10 million monthly may also be argued.

Though the relief bundle comes with trade-offs. A contentious proposal to impose a 5 percent income tax on retirees is under deliberation, raising alarm among retired public servants and union groups.

The government is also offering tax relief for manufacturers and the real estate sector, including the elimination of withholding taxes on raw material imports and cuts in property transaction taxes. While imported vehicles may get duty release, locally accumulated cars with engines over 1300cc could see higher taxes.