The Federal Board of Revenue (FBR) is considering a proposal to increase tax rates on profit earned from bank deposits in the upcoming federal budget for 2025-26.
The move aims to generate more revenue, especially if the government decides to give tax relief to salaried individuals.
According to official sources, the FBR is reviewing several measures to make up for the possible shortfall in tax collection. One such step is raising taxes on income earned passively—such as the profit people and companies earn from money kept in bank accounts and savings schemes.
At present, individuals who file tax returns (filers) pay a 15% tax on profit from bank deposits, while those who do not file returns (non-filers) pay a much higher rate of 35%. The FBR is now considering increasing this tax rate by 2% for both filers and non-filers. This means filers may have to pay 17% and non-filers 37% in the future.
This proposal comes amid pressure from the International Monetary Fund (IMF), which has asked for clear plans on how Pakistan will cover revenue gaps if it offers tax relief to some sectors, especially salaried workers. Last year’s budget introduced higher taxes under the IMF program, but formal business activity shrank as a result, leading to lower tax collection.
By focusing on passive income sources like profit from bank deposits, the government hopes to raise funds without placing more burden on active business sectors. Since many people and companies rely on bank savings for safe returns, the FBR sees this as a feasible way to enhance revenue.
If approved, the increased tax on deposits will affect both individuals and businesses. People are advised to review their bank investments and plan accordingly, especially those who depend heavily on income from deposits. The final decision will be made in the upcoming budget announcement.