The Institute of Cost and Management Accountants of Pakistan (ICMA) has proposed a set of taxation and policy measures for the upcoming Budget 2026-27, recommending new levies on digital services, online gaming, corporate advertising, and second-home ownership to widen the country’s tax base.
The proposals, submitted to the Tax Policy Office (TPO) of the Ministry of Finance, are based on an assessment of Pakistan’s economic priorities, sectoral challenges, and international best practices, with a focus on documentation and revenue mobilisation.
ICMA has suggested the introduction of a Digital Services Tax (DST) to tap into the rapidly expanding digital economy, including streaming platforms, mobile applications, gaming, and other online services. The institute said the measure would help formalise digital business activity and ensure equitable contribution to national revenues.
The body has also recommended a regulated licensing regime for online and speculative gaming, proposing that only licensed operators be allowed to operate under government oversight, subject to a 2 percent tax on gross revenues. The move is aimed at bringing an informal sector into the tax net while ensuring consumer protection.
To enhance revenue collection from large enterprises, ICMA has proposed a levy on corporate advertising and brand promotion expenditures for companies with an annual turnover exceeding Rs. 100 million. The proposal suggests utilising existing invoicing mechanisms to minimise administrative complexity.
In the real estate sector, the institute has recommended the imposition of an Additional Residential Property Tax (ARPT) on second homes or investment properties valued above Rs. 20 million, while exempting primary residences and first-time buyers. The measure is intended to discourage speculative investment and improve housing availability.
ICMA has further proposed a Financial Transaction Tax (FTT) on equities, derivatives, and digital asset trades to generate revenue from financial market activity. It also suggested a one-time settlement scheme to resolve long-pending tax disputes, allowing taxpayers to settle cases by paying a reduced proportion of the disputed amount.
To promote documentation in the retail sector, the institute recommended the introduction of a National Consumer Receipt Lottery, under which consumers submitting verified receipts would be eligible for cash prizes.
Additionally, a Windfall Gains Tax has been proposed for sectors such as sugar, oil and gas, and fertiliser during periods of extraordinary profits linked to global price fluctuations, to ensure public benefit from such gains.
On the urban development front, ICMA has called for the nationwide adoption of Building Information Modelling (BIM) to digitise planning and monitoring of infrastructure projects, alongside the introduction of a Commercial Building Safety Levy (BSL) of 0.25 percent on commercial property transactions. It also recommended tax incentives for certified green buildings, including a 1.5 percent concession on financing costs and rental income.
In the area of climate and environmental policy, ICMA has proposed a series of green taxation measures, including property tax relief for EV charging infrastructure, a landfill disposal tax, a Progressive Carbon and Pollution Levy (PCPL) on high-emission industries, and a Green Transport Levy (GTL) of 2 percent on fuel and high-emission vehicles. A Carbon Market Levy has also been suggested for businesses engaged in carbon trading.
The institute stated that these measures are aimed at promoting sustainable development, encouraging the adoption of cleaner technologies, and generating dedicated resources for environmental protection initiatives.
