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Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. •

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Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. •

Finance Act 2025: Major Amendments Impacting Taxpayers in Pakistan

The Finance Act, 2025, introduces sweeping changes across Pakistan’s tax and regulatory landscape, including new levies, digital compliance mandates, and reforms in the Customs, Sales Tax, and Stamp Acts. Learn the key updates impacting businesses, e-commerce, and citizens from July 1, 2025.

The Finance Act, 2025, which comes into force on July 1, 2025, introduces a series of significant amendments across various laws in Pakistan, including the Stamp Act, 1899, the Petroleum Products (Petroleum Levy) Ordinance, 1961, the Customs Act, 1969, the Sales Tax Act, 1990, and other acts related to parliamentary and ministerial privileges. These changes aim to enhance revenue collection, improve regulatory frameworks, and promote digital transformation in the economy.

Amendments in Income Tax Ordinance 2001

The Act formally defines “digitally delivered services” to include a wide range of online offerings, from streaming and cloud services to telemedicine and e-learning.

Tax on Digital Transactions

Payments made through digital means or banking channels via a payment intermediary will be taxed at a rate of 1% of the gross amount.
Payments made via Cash on Delivery (COD) through courier services will be taxed at 2% of the gross amount.
Both payment intermediaries and courier services are now required to file quarterly/monthly withholding tax statements.

Penalties for Non-Compliance in E-commerce

Online sellers of digitally ordered goods/services who fail to register under the ITO will face a penalty of Rs500,000 for the first default, and Rs1 million for every subsequent default.
Banking companies, payment gateways, or courier service providers who fail to deduct or pay tax on digitally ordered goods/services will face a penalty equal to 100% of the amount of tax involved.

Changes for Individual Taxpayers

Reduced Salary Tax Rates: The income tax rates for salaried individuals have been generally reduced across various slabs, offering some relief.
Pension Income Tax: Pension amounts exceeding Rs10 million will now be taxed at 5% on the exceeding amount.
Increased Cash Withdrawal Tax for Inactive Taxpayers: The rate of tax on cash withdrawals for inactive taxpayers has been increased from 0.6% to 0.8%.

Restrictions on Transactions for “Ineligible Persons”

Section 114C restricts individuals who are not “eligible persons” (i.e., not compliant filers with sufficient declared resources) from engaging in certain high-value transactions.

Motor Vehicle Purchase/Registration: Restricted for vehicles exceeding Rs7 million in value. (Exemption applies to non-resident persons and public companies).
Immovable Property Purchase/Transfer: Restrictions apply to commercial properties exceeding Rs100 million and residential properties exceeding Rs50 million in Fair Market Value.
Investment in Securities/Mutual Funds: Restricted for new investments exceeding Rs50 million in a financial year.
Annual Cash Withdrawal Limit: An overall limit of Rs100 million in annual cash withdrawals across all bank accounts for an individual.

Property & Investment Related Changes

Hike in Profit on Debt Rates: The tax rate on profit on debt has been increased by 5% for profits from banks, rest are unchanged.
Increased Dividend Tax Rates: Dividend tax rates have been generally increased.
Property Purchase Tax (Section 236K): Taxes under this section for the purchase of property have been reduced by 1.5% for both filers and non-filers.
Property Sale Tax (Section 236C): Taxes under this section for the sale of property have been increased by 1.5% for both filers and non-filers.
Tax Credit for Low-Cost Housing Loan Interest (Section 63A): A new tax credit has been introduced for interest paid on low-cost housing loans, encouraging affordable housing.

Business & Enforcement Measures

Expenditure Disallowance for Non-Banking Payments: For businesses, 50% of claimed expenditure will be disallowed if the payment for a single invoice exceeding Rs200,000 was received otherwise than through a banking channel or digital means.
Exchange of Banking and Tax Information (Section 175AA): The FBR is now empowered to share tax declaration information with scheduled banks for cross-matching with bank data using prescribed algorithms, particularly for “high-risk persons.” Banks must report variances.
Posting of Inland Revenue Officer (Section 175C): FBR officers can now be posted at business premises to monitor production, supply of goods/services, and stock levels to determine tax payable.
Enhanced Tax Rate on Services: The general tax rate on services has been increased from 10% to 15%.

Amendments in the Stamp Act, 1899

Stamp Duty on Conveyance: The stamp duty on conveyance of immovable property, as defined under clause (10) of section 2 and not exempted under Article 62, will now be levied at one percent of the property’s value.

Amendments in the Petroleum Products (Petroleum Levy) Ordinance, 1961

Climate Support Levy: A “Climate Support Levy” has been introduced in addition to the existing Petroleum Levy. This new levy will be charged at a rate of PKR 2.5 per liter on Motor Spirit and High-Speed Diesel for the Financial Year 2025-26, increasing to PKR 5 per liter for Financial Year 2026-27. A similar levy will be imposed on Furnace Oil at PKR 2.5 per liter (PKR 2,665/MT) for FY 2025-26, also increasing to PKR 5 per liter for FY 2026-27.

Amendments in the Customs Act, 1969

The Customs Act sees extensive amendments aimed at modernizing customs operations and combating smuggling.

Digital Systems: New definitions for “Cargo Tracking System” and “e-bilty” have been introduced to facilitate digital monitoring of goods, preventing smuggling, and electronically tracking import, export, transit, and transshipment within or into/out of Pakistan.
Directorate General Restructuring: The roles and powers of the Directorate General of Intelligence and Risk Management, Customs Auction, and Communication and Public Relations have been updated.
Hiring of Specialists: The Board is now authorized to hire technology specialists, auditors, accountants, and goods evaluators on short-term contracts for up to two years.
Cargo Tracking System and e-Bilty Mechanism: A mandatory “Cargo Tracking System” and “e-Bilty Mechanism” are established for persons involved in the movement of goods from/to seaports, land border stations, inland dry-ports, or for inland movement. Violations can lead to fines, penalties, and confiscation of goods and conveyances.
Centralized Units: The Board can now establish Centralized Assessment Units and Centralized Examination Units to streamline import, export, and transit consignments, including digitalized assessment using artificial intelligence tools.
Un-cleared Goods Procedure: Stricter procedures and penalties are introduced for goods not cleared, warehoused, transshipped, exported, or removed from the port within specified timeframes. Goods may be auctioned or confiscated, with provisions for perishable or hazardous goods.
Customs Command Fund: A “Customs Command Fund” will be established, funded by the sale proceeds of auctioned smuggled goods, to support anti-smuggling activities.
Digital Enforcement Station: The Board can declare “Digital Enforcement Stations” to prevent smuggling and illicit trade, and can hire retired armed forces personnel for these stations.
Presumption of Smuggled Vehicles: Vehicles with tampered chassis numbers, cut and weld chassis, or re-stamped chassis numbers will be presumed smuggled and confiscated, even if registered. These confiscated vehicles may be used for operational purposes.
Revised Time Limits: Several time limits for adjudication and appeals have been revised, extending periods for notices and application processing.

Amendments in the Sales Tax Act, 1990

Significant changes focus on digital transactions and tax compliance.

New Definitions: Several new terms are defined, including “abettor” (for tax fraud), “Cargo Tracking System”, “courier”, “e-bilty”, “e-commerce”, “online marketplace”, “payment intermediary”, and an expanded definition of “tax fraud”.
Tax on E-commerce: For digitally ordered taxable goods, the liability to collect and pay tax will now rest with the payment intermediary (e.g., banking company, financial institution) for digital payments, and with the courier for Cash on Delivery (CoD) transactions.
New Registration Requirements: Persons selling digitally ordered goods through online marketplaces, websites, or software applications, and online marketplaces or couriers involved in e-commerce, are now required to register for sales tax.
Monthly Statements: Payment intermediaries and couriers are mandated to furnish true, complete, and correct monthly statements for digitally ordered goods transactions.
Appointment of Experts and Auditors: The Board or Commissioner can now appoint experts and auditors for assistance in audit, investigation, litigation, or valuation.
Inspection of Audit Firms: Chief Commissioners Inland Revenue can, with Board approval, refer audit firms for inspection by the Audit Oversight Board if audited accounts do not reflect a true and fair view of sales and purchases or sales tax liability.
New Taxable Imports: Import of pet food (dogs and cats) and coffee and chocolates sold in retail packing are now subject to sales tax.

Enactment of New Tax Laws

Digital Presence Proceeds Tax Act, 2025: This new act imposes a 5% tax on payments for cross-border transactions of digitally ordered goods and services, including advertisements on social media platforms.
New Energy Vehicles Adoption Levy Act, 2025: This act provides for the imposition and collection of a levy on internal combustion engine vehicles to promote the adoption of new energy vehicles.

Other Notable Amendments

Salaries of Parliamentarians and Ministers: The salary of Federal Ministers and Ministers of State will now be equivalent to that of a Member of the National Assembly.
ICC Champions Trophy 2025 Exemption: Income derived by ICC Business Corporation (IBC), International Cricket Council (ICC), and associated individuals (excluding Pakistani residents) from the ICC Champions Trophy 2025 hosted in Pakistan is exempt from tax.
Restriction on Economic Transactions: Restrictions are imposed on “ineligible persons” from booking, purchasing, or registering motor vehicles exceeding a certain threshold.

TaxationPk · Pakistan’s Finance Act 2025 Taxation and Customs Amendments

These comprehensive changes reflect the government’s strategy to enhance revenue collection, promote documentation, and modernize the tax system, with a particular emphasis on the digital economy and ensuring compliance from all segments of the financial landscape.

Quratul Ain

Content Writer at TaxationPk, responsible for creating engaging and informative content on taxation in Pakistan. Dedicated to making complex tax matters accessible through well-researched and compelling articles.

Articles: 77

3 Comments

abdullah

July 28, 2025 / 11:41 am Reply

who is exempted for sales tax if i am onliner seller
- Hayat Akbar
  
  July 28, 2025 / 7:52 pm Reply
  
  Currently no exemptions are granted in Sales Tax for online sellers. Instead their accounts will be freezed. There are heavy fines on Couriers and Banks if they provide services to unregistered businesses.
Sajjad Ahmad

July 13, 2025 / 1:52 pm Reply

Very helpful analysis.

Finance Act 2025: Major Amendments Impacting Taxpayers in Pakistan