ISLAMABAD: The Pakistan government is expected to bring freelancers, vloggers, and YouTubers under the tax net in the upcoming federal budget for the fiscal year 2025-26. According to a research report by Topline Research released on Thursday, these new measures could generate an additional Rs500-600 billion in tax revenues.
The report titled ‘Pakistan Federal Budget FY26 Preview’ projects that the Federal Board of Revenue (FBR) will have a revenue collection target of Rs14.1-14.3 trillion, reflecting a year-on-year growth of 16-18% compared to the current fiscal year. Of this growth, 12% will be driven by autonomous factors such as a real GDP growth of 3.6% and inflation at 7.7%. The remaining 4-5% growth will come from fresh tax measures, including taxing digital content creators.
Various institutions, including the Institute of Cost and Management Accountants of Pakistan (ICMAP), have recommended taxing income from social media platforms like YouTube and TikTok. ICMAP proposed a 3.5% tax on social media earnings, expecting to collect around Rs52.5 billion from this sector alone.
The government is also considering introducing a tax on pensioners receiving monthly pensions exceeding Rs400,000, with rates ranging from 2.5-5%. The move aims to raise Rs20-40 billion in additional revenues. Pension expenditures already total approximately Rs900 billion annually.
Additional fiscal measures expected include calculating GST on commodities based on market prices rather than outdated rates, which could generate Rs70-80 billion annually. There are plans to increase the federal excise duty (FED) on ultra-processed food and cigarettes to promote health awareness and curb diseases related to unhealthy diets.
Other tax reforms include removing the non-filer category, imposing petroleum development levies (PDL) on furnace oil, and raising PDL on petrol and diesel as a form of carbon tax, potentially adding Rs35-80 billion to government revenues.
The government is also likely to eliminate GST concessions, impose agriculture income tax provincially, and raise GST on luxury items. To balance these measures, some reliefs for salaried workers, real estate incentives, and vehicle import duty reductions are under consideration.
The Budget 2025-26 presentation is scheduled for June 2, 2025.
