Freelancers, Social Media Stars, and Pensioners Face New Taxes as Govt Eyes Rs. 600 Billion Tax Raid

Freelancers, Social Media Stars, and Pensioners Face New Taxes as Govt Eyes Rs. 600 Billion Tax Raid

The federal government is gearing up to introduce a raft of new tax measures in the 2025-26 budget, aiming to raise up to Rs. 600 billion in additional revenue, according to a report by Topline Securities.

Among the headline proposals is a 3.5 percent tax on income earned from social media platforms such as YouTube and TikTok, which is expected to net Rs. 52.5 billion. The government is also considering a tax of 2.5 to 5 percent on monthly pensions exceeding Rs. 400,000, with projected revenue between Rs. 20 and 40 billion. Pension spending has already soared to Rs. 673 billion this year and is forecast to reach the Rs. 1 trillion mark.

In a move to align tax policy with market realities, the government plans to adjust the General Sales Tax (GST) on selected items based on market prices reported by the Pakistan Bureau of Statistics. For example, GST on sugar is currently calculated at Rs. 72.22 per kilogram, while the market price stands at Rs. 150. This adjustment could generate an additional Rs. 70-80 billion.

The budget is also expected to include a 20 percent hike in federal excise duty on processed foods such as snacks and biscuits, with a long-term target of reaching 50 percent by 2029. Excise duty on cigarettes is also likely to be increased.

To crack down on tax evasion, the government has submitted a bill to eliminate the nonfiler category, which would bar nonfilers from purchasing vehicles and property. Section 114C of the Income Tax Ordinance is set to be introduced, potentially with new threshold adjustments.

A petroleum development levy on furnace oil is under review, and a Rs. 5 per liter increase in the levy on petrol and diesel may be introduced as a carbon tax. Depending on the rate applied to furnace oil, this measure could raise between Rs. 35 and 80 billion.

In line with IMF requirements, the government must collect Rs. 295 billion from retailers by December 2025 and may increase advance taxes on distributors to help meet this target.

Additionally, the IMF has proposed a 5 percent increase in federal excise duty on fertilizers and pesticides, a move that could generate over Rs. 30 billion in revenue.