The Finance Bill 2025 is set to introduce major changes in the withholding tax regime, and it will be tougher for non-filers.
The gap between withholding tax rates for filers and non-filers will be further widened from July 1, 2025.
Currently, withholding taxes account for over 70 percent of direct tax revenue.
One key proposal is to raise the withholding tax rate on cash withdrawals by non-filers from the existing 0.6 percent to between 1 and 1.2 percent.
The Federal Board of Revenue is also considering an increase in tax rates on interest income, as well as the imposition of a new 1.5 percent withholding tax on the value of imports.
In the real estate sector, withholding tax rates on immovable property transactions are expected to be rationalized to facilitate buyers and sellers.
Additional proposals under review include an increase in withholding tax rates on supplies, services, and contracts. These measures are aimed at broadening the tax base and reinforcing the government’s efforts to raise domestic revenue without introducing new direct taxes.
even after all this nonsense the treasury will still be empty.