The National Assembly Standing Committee on Finance, chaired by MNA Naveed Qamar, has approved several significant tax-related proposals under the Finance Bill 2025, targeting non-filers, online businesses, mutual funds, and digital advertising platforms.

The reforms aim to expand the tax base, curb evasion, and ensure compliance amid mounting pressure from the International Monetary Fund (IMF).

Non-filers, e-commerce, and cash transactions

In a major move, non-filers will now be taxed at 1% on daily bank withdrawals exceeding Rs75,000 and the withholding tax on this increased to 0.8%. Online businesses with annual turnover of up to Rs5 million will be required to register with the Federal Board of Revenue (FBR), while all online businesses using online platforms will have to be registered with the board.

The committee also approved a proposal to impose a 5% withholding tax on cash-on-delivery purchases and e-commerce transactions. Courier service providers will now act as withholding agents and must submit monthly statements, with a Rs50,000 fine for non-compliance over three consecutive months.

Additionally, businesses using online platforms and manufacturing units exempt from sales tax will now fall under FBR’s monitoring authority. Registered businesses will also be obligated to submit monthly sales and income statements.

FBR granted new investigative powers

The FBR will now have the power to track CNIC-linked transactions, especially where multiple bank accounts are used for a single business. In cases of discrepancies between declared returns and actual business activity, the FBR may even probe family tree connections to detect hidden assets or evasion.

Banks will be directed to share transaction data that exceeds declared returns with the central bank and commercial data banks.

Changes in investment, mutual funds, digital ad taxes

The committee approved increasing the tax rate on mutual fund profits to 25%, and introduced a 15% tax on digital advertising revenues.

Furthermore, a 20% tax will now apply to profits earned from interest on loans, while T-bills and Pakistan Investment Bonds will be subject to taxation if withdrawn within six months. A six-month holding period has been set for investors to qualify for tax exemptions on these instruments.

Meanwhile, Roshan Digital Accounts will remain exempt from any deposit or withdrawal taxes, according to Central Bank officials.

Supertax and salaried class relief

The panel approved a 0.5% reduction in supertax on turnover below Rs500 million. For the salaried class, the income tax rate on annual earnings between Rs600,000 and Rs1.2 million will be reduced from 5% to 1%, offering some relief amid rising inflation.

However, the committee rejected a proposal to provide a 25% tax rebate for federal teachers after the IMF declined to endorse it. The FBR chairman suggested that subsidies for teachers should be provided through the federal budget, not through tax exemptions.

Other major approvals

Non-profit organizations will now be required to submit reports every three years under the Income Tax Second Schedule.
Tax auditors will be appointed with strict provisions to prevent data leaks.
Tax exemption for ICC Champions approved.
Approval was also given to end tax exemptions for economic and special technology zones.
The Digital Presence Proceedings Act 2025 was passed to enhance digital tax monitoring.
Institutions like the Port Qasim Authority, which holds Rs235 billion in bank accounts, will now be required to deposit revenues in federal funds. The finance minister criticized such entities for acting like “states within a state", saying these organizations would be returned the money whenever they would need it.