The Finance Bill 2025, effective from July 1, 20251111, introduces several significant amendments across various laws, impacting taxes, customs, and financial management in Pakistan. This bill aims to implement the Federal Government’s financial proposals for the upcoming fiscal year. Below is a concise overview of the major changes to help you understand the implications.
Key Amendments:
- Stamp Duty and Registration Act Changes
- Stamp Duty: Stamp duty on property conveyance will now be 1% of the immovable property value for tax filers and 2% for non-filers2.
- Registration Fee: The previous limit on registration fees (not exceeding 1% of property value) has been removed3.
- Petroleum Products (Petroleum Levy) Ordinance Amendments
- Carbon Levy Introduction: A new “Carbon Levy” of Rs. 2.5 per liter will be imposed on Motor Spirit, High-Speed Diesel, and Furnace Oil for the Financial Year 2025-26, increasing to Rs. 5 per liter in 2026-27. This is in addition to the existing Petroleum Levy4.
- Customs Act, 1969 Enhancements
- Digital Systems: The bill introduces “cargo tracking system” for electronic monitoring of goods and “e-bilty” as a digital document to accompany transported goods to prevent smuggling5555.
- Directorate Generals: New Directorates General for Intelligence and Risk Management, Customs Auction, and Communication and Public Relations have been established or restructured6.
- Hiring of Specialists: The Board can now hire technology specialists, auditors, accountants, and goods evaluators on short-term contracts7.
- Monetary Limits: The value limit for duty-free goods through post or courier has been reduced from five thousand to five hundred8. The maximum amount for certain actions without penalty has been increased from twenty thousand to one hundred thousand9.
- Auction Proceedings: No court shall stay auction proceedings unless 50% of the reserve price is furnished as a pay order or bank guarantee10.
- Smuggled Vehicles: Vehicles with tampered chassis numbers will be presumed smuggled and liable to confiscation, even if registered11.
- Customs Command Fund: A “Customs Command Fund” will be established using proceeds from smuggled goods auctions to support anti-smuggling activities12.
- Digital Enforcement Stations: The Board can establish “Digital Enforcement Stations” to prevent smuggling and illicit trade, and can hire retired armed forces personnel on contract13.
- Sales Tax Act, 1990 Modifications
- Definitions: New definitions include “abettor” for those involved in tax fraud, “courier” for delivery entities, “e-commerce” for online sales, “online marketplace,” and “payment intermediary”14141414.
- Tax Fraud: The definition of “tax fraud” has been expanded to include various dishonest acts to cause tax loss, such as using false documents, suppressing supplies, and fake input tax claims15.
- E-commerce Tax Liability: For digitally ordered goods via e-commerce within Pakistan, the payment intermediary (e.g., banking company, payment gateway) or the courier (for Cash on Delivery) will be responsible for collecting and paying tax16. This will be considered the final discharge of tax liability for online marketplaces and vendors17.
- Penalties for Online Platforms: Online marketplaces, payment intermediaries, or couriers failing to furnish monthly statements or allowing unregistered persons to use their services will face penalties up to one million rupees for subsequent defaults18.
- Input Tax Adjustment: The Board can use a data-based automated risk management system to defer or fix limits on input tax adjustments19.
- Import of Specific Goods: New items like imported pet food, coffee, chocolates, and cereal bars sold in retail packing have been added to the Third Schedule for sales tax20.
- Income Tax Ordinance, 2001 Adjustments
- Tax Rates: Revised income tax rates for individuals have been introduced, with specific rates for pension income21.
- Digital Transactions: A new tax rate of 0.25% to 2% is introduced on payments for digitally ordered goods or services through e-commerce platforms, depending on the amount22.
- Offshore Digital Services: A 5% tax rate is applied to services, including advertisement on social media platforms, and goods for payments made to foreign providers for digitally ordered services or goods23232323.
- Information Furnishing: Online marketplaces, payment intermediaries, and courier services are now required to furnish specific monthly or quarterly statements to the Commissioner, including seller details and transaction values24.
- New Energy Vehicles Adoption Levy Act, 2025
- This new act imposes a levy on internal combustion engine vehicles, with the proceeds dedicated to promoting the adoption of new energy vehicles25. The levy will be collected similar to customs duties on imported vehicles and sales tax on locally manufactured or assembled vehicles26.
This Finance Bill introduces significant changes aimed at improving tax collection, digitalizing customs and sales tax processes, and promoting new energy vehicles.
For a complete understanding, you can download the full Finance Bill 2025 PDF file here:
Finance Bill 2025, Pakistan Budget, Tax Reforms, Customs Act, Sales Tax, Income Tax, Energy Vehicles Levy, Economic Policy, Financial Proposals
