ISLAMABAD: Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial confirmed on Wednesday that the upcoming federal budget (2025-26) will be tough, offering tax relief for the salaried class but no sales tax concessions or reductions for businesses.
Speaking during a meeting of the Standing Committee on Finance and Revenue at the Parliament House, chaired by MNA Syed Naveed Qamar, the FBR chairman categorically stated that, except for tax relief for the salaried class, no reductions in sales tax would be possible under the current circumstances.
Responding to a proposal from the dairy sector to cut sales tax from 18% to 5%, the FBR chief reiterated that the upcoming budget would be “tough,” emphasizing that Pakistan remains bound by commitments under the International Monetary Fund (IMF) program, which restricts any broad-based tax relief measures.
“We are at a difficult point in terms of revenue collection,” he said, explaining that economic assumptions such as GDP growth, imports, inflation, and large-scale manufacturing figures used to set the tax collection targets for 2024-25 have now shifted.
The chairman further informed the committee that while a tax policy unit has been established at the Ministry of Finance, for now, the FBR will continue to oversee the upcoming budget process until the new unit becomes fully operational.
Despite calls from Finance Committee Chairman Naveed Qamar to reduce sales tax on milk and offset the shortfall elsewhere, the FBR chairman maintained that sales tax cuts are unlikely. He added that convincing the IMF to allow such sector-specific relief would be extremely challenging under the current revenue pressures.
Ultimately, while tax relief for the salaried class remains under consideration for the 2025-26 budget, the broader business community should brace for a tough fiscal environment with no immediate respite in sales taxes.
