The Government of Pakistan, through its Finance Bill 2025-26, is set to introduce wide-ranging fiscal reforms focused on expanding the tax net and regulating both cash-based and digital transactions.

Among the key proposals is the revised ATM cash withdrawal limit for non-filers. According to the Federal Board of Revenue (FBR), non-filers will now be able to withdraw up to Rs. 75,000 per day without tax, an increase from the previous Rs. 50,000. However, any amount beyond this limit will incur a 0.8% withholding tax, up from 0.6%.

Digital Economy and E-Commerce: Under the Tax Radar

In a bold move to regulate online marketplaces, the government is also introducing taxes on digital retail activities. The proposed taxation structure includes:

• 2% income tax on online apparel businesses
• 0.5% income tax on electronics sales via digital platforms
• 1% tax on all other e-commerce activities

These businesses will be required to submit billing records as part of their tax returns. This step aims to enforce compliance and minimize underreporting.

International Tech Platforms Face Higher Taxation

The bill also suggests a 5% increase in advance tax on foreign digital service providers, raising it from 10% to 15%. Platforms such as YouTube, Facebook, and Google will be impacted. Companies establishing local offices may benefit from a reduced tax rate of 5%, encouraging global tech firms to invest in Pakistan.

Additionally, banks and courier services will be authorized to act as tax collectors, and online merchants will no longer be allowed to shift tax costs to consumers.

These reforms reflect the government’s focus on bringing the digital economy into the formal sector, thereby increasing transparency in Pakistan’s financial ecosystem.