Budget 2025-26: Which items are going to be more expensive?

The prices of a number of items are going to increase after announcement of the federal budget 2025-26 on Tuesday.

There is a proposal to increase the sales tax on the made-in-Pakistan vehicles from 12.5 percent to 18 percent in the Budget 2025-26, according to sources.

New taxes have been proposed on bakery items, fertilisers and insecticides. Tax relief on cigarettes and cold drinks has been proposed. Removal of the current federal excise duty on the real estate sector has been proposed. On the other hand, an increase in the capital gains tax on the real estate sector has been proposed. Also, the government has prepared a plan to bring those making money from social media and digital platforms into the tax net. New taxes have been proposed on the money earned from abroad through freelancing and social media channels.

Another proposal says that tax exemption for the formerly Federally Administered Tribal Areas (FATA) should be abolished. Twelve percent tax is likely to be imposed on the FATA region. A cut in super tax has been proposed in the upcoming budget. The construction sector is likely to get tax relief. Additional regulatory duty on several imported items is also likely to be decreased. Around 2-3 percent cut is likely in the customs duty on the imported items.

Duty on the raw material imported for the industry is also likely to be decreased. Withholding tax on the imported raw material for the industry is likely to be decreased or demolished altogether.

A steady decrease in super tax on big companies has been proposed in the next budget. Companies earning Rs150 million or more profit are likely to remain exempt from super tax. A 0.5 percent decrease in super tax is likely for the companies earning Rs200 million profit. This means that super tax will be decreased from 1 percent to 0.5 percent. Companies earning Rs300 million profit will continue to pay 4 percent super tax. Super tax ratio for the corporate sector is also likely to be kept the same. A decrease in withholding tax on the raw material imported by the construction industries is also likely to be decreased.