Karachi, June 14, 2025 – The Institute of Cost and Management Accountants of Pakistan (ICMAP) has lauded the federal government for integrating several of its key recommendations in the newly unveiled budget for the fiscal year 2025-26.
In an official statement, ICMAP stated that the adoption of its proposals in the budget represents a constructive stride toward building a more balanced, inclusive, and forward-looking tax regime in Pakistan.
The budget proposals, developed by ICMAP’s Research and Publications Department, were formally submitted to the Federal Board of Revenue (FBR) by the January 31, 2025, deadline. These recommendations focused on expanding the tax base, alleviating the burden on salaried individuals, and ensuring fair taxation across emerging and digital sectors of the economy.
Finance Minister Muhammad Aurangzeb, during his budget speech on June 10, 2025, announced a range of measures that closely align with ICMAP’s submissions. Among the most notable is the imposition of a withholding tax on high-value pensions — a move proposed by ICMAP to ensure affluent retirees contribute equitably, while low- and middle-income pensioners remain protected.
ICMAP also called for a phased taxation system to support the electric vehicle (EV) sector, and this was reflected in the budget through new levies on internal combustion engine vehicles. The aim is to encourage a gradual transition to eco-friendly technologies without placing undue financial pressure on the nascent EV market.
In the digital domain, ICMAP’s proposal to tax cross-border e-commerce has been implemented via Section 6A of the Finance Bill, ensuring that offshore sellers of digital goods and services contribute their fair share. Additionally, a 5% tax on payments for foreign digital advertisements — a long-standing ICMAP demand — has been introduced. Streaming services and other paid digital subscriptions now fall under a revised tax regime, aligning with ICMAP’s push for equitable treatment of digital consumers.
Further, ICMAP’s call for incentivizing renewable energy investment has been acknowledged through the continuation of zero customs duty on solar and clean energy equipment. Although direct tax rebates were not introduced, this exemption promotes sustainable development goals.
In the real estate sector, the budget partially addresses ICMAP’s recommendation to tax high-value properties by increasing advance tax rates on large transactions, signaling a gradual shift toward a more equitable asset taxation framework.
By embracing several ICMAP proposals in the 2025-26 budget, the government has demonstrated openness to innovative fiscal strategies and a shift from over-reliance on the salaried class. ICMAP reaffirmed its commitment to supporting the government with evidence-based policy advice to ensure a fair, modern, and growth-oriented tax system.