In the upcoming budget for FY2025-26, the federal government is considering a series of tax measures aimed at increasing the tax burden, particularly targeting bank withdrawals and petrol-powered vehicles. According to sources, one of the key proposals includes a hike in withholding tax for non-filers making cash withdrawals.
Currently set at 0.6 percent, the withholding tax on bank withdrawals by non-filers may be increased to 1.2 percent. Additionally, the government is considering a further levy on daily withdrawals exceeding Rs50,000. This move is designed to broaden the tax base and reduce undocumented cash transactions.
Officials are also reviewing tax rates on profit-generating instruments such as bank deposits and savings schemes, with higher taxes on capital gains and profits likely to be introduced to boost government revenue. This comes as the economy remains sluggish and pressure from IMF commitments continues to mount.
In another significant development, the government is looking to apply an 18 percent general sales tax (GST) on e-commerce transactions, which would replace the existing lower slab. This change would make digital platforms subject to the standard sales tax regime for the first time.
In terms of environmental regulation, the government is considering imposing new levies on petrol and diesel-powered vehicles. This proposal aims to promote fuel efficiency and encourage a shift towards electric and hybrid vehicles.
Additionally, there are discussions around raising GST on locally manufactured vehicles, particularly small cars up to 850cc, from the current 12.5 percent to 18 percent, aligning it with the standard GST rate.
As part of the broader tax overhaul, the government is also weighing a reduction in the super tax rate for large corporations to incentivize investment and job creation, a move reportedly supported by the business
