Islamabad, June 23, 2025 — In a bid to provide targeted relief to the salaried class, the Federal Board of Revenue (FBR) has announced the introduction of new taxation measures aimed at compensating for revenue losses in the federal budget for 2025-26.
This shift in strategy comes as part of an effort to uphold the fiscal framework agreed upon with the International Monetary Fund (IMF), without burdening salaried individuals further.
To fill the gap created by a 10% salary hike for government employees and a reduction in General Sales Tax (GST) on solar panels, the FBR has proposed three major tax changes. These include the imposition of a 10% Federal Excise Duty on Day Old Chicks (DOC) in the poultry sector, an increase in tax from 25% to 29% on dividends received by companies from mutual funds generating profit on debt, and a hike in the withholding tax from 15% to 20% on profit from government securities paid to institutional investors, excluding individuals.
The IMF has been pressing the FBR and the Finance Ministry to ensure that all revenue projections are accurate. According to the IMF, the government’s decision to raise salaried employees’ pay would cost around Rs29-30 billion. Meanwhile, reducing the GST on solar panels from 18% to 10% could result in an additional revenue loss of Rs6-8 billion. Altogether, the IMF has asked for additional revenue measures totaling Rs36-38 billion to bridge the shortfall.
Chairman FBR, Rashid Mahmood Langrial, shared these figures with the National Assembly’s Standing Committee on Finance. He emphasized that the proposed tax adjustments are designed to prevent the need for a mini-budget, while maintaining relief for the salaried class.
Langrial noted that out of six new tax proposals shared with the IMF, three have already received approval. He also stated that these measures would be incorporated into amendments to the Finance Bill 2025-26. So far, the FBR has introduced total taxation measures worth Rs312 billion and enforcement measures of Rs389 billion for the upcoming fiscal year.
Despite these adjustments, the FBR remains committed to shielding the salaried population from additional financial pressure, while striving to meet revenue targets under the IMF agreement.