Breaking News: Govt Plans New Taxes on Mobile Calls, Solar Panels & Cash Withdrawals in 2025
🕒 Published: October 31, 2025 by Muqaddas Tahreem
The Government of Pakistan is preparing to introduce new tax measures in 2025 that could increase costs for millions of citizens. According to official reports, taxes on mobile phone calls, solar panels, and bank cash withdrawals may rise under a fiscal plan linked to the International Monetary Fund (IMF). This move aims to keep Pakistan’s $7 billion bailout program on track while ensuring revenue stability amid growing economic challenges.
The new tax increase in Pakistan 2025 will only be enforced if the Federal Board of Revenue (FBR) fails to achieve its half-yearly collection targets or if government spending crosses the limits agreed upon with the IMF.
Why the Govt Plans to Increase Taxes in 2025
Pakistan has assured the IMF that it will implement Rs. 200 billion worth of additional taxes if fiscal targets are not met. The government’s commitment reflects the IMF’s strict conditions for continuing financial assistance.
The FBR has already reported a Rs. 198 billion shortfall during the first three months of the fiscal year. As of October 29, 2025, the FBR had collected Rs. 3.65 trillion, but still needed another Rs. 460 billion in less than two days to meet its four-month target.
To address this gap, the Ministry of Finance is preparing a contingency plan that includes new taxes on telecommunications, renewable energy, and financial transactions — sectors that directly affect both consumers and businesses.
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Proposed Tax Changes – Key Details
| Category | Current Rate | Proposed Rate | Expected Revenue (Rs. Billion) |
|---|---|---|---|
| Mobile Calls | 15% | 17.5% | 24 |
| Landline Calls | 10% | 12.5% | 20 |
| Cash Withdrawals (Non-Filers) | 0.8% | 1.5% | 30 |
| Solar Panels (Sales Tax) | 10% | 18% | — |
| Confectionery & Biscuits (FED) | — | 16% | 70 |
| Standard Sales Tax (Possible Revision) | 18% | 19% | 225 |
If implemented, these measures could generate Rs. 200–225 billion in additional revenue during the second half of the fiscal year. The higher taxes will mainly target non-filers, telecom users, and solar energy buyers, as well as manufacturers of processed foods.
Impact on Mobile and Landline Users
The proposed hike in mobile and landline taxes will directly impact over 195 million telecom users in Pakistan. Increasing the tax rate on cellular calls from 15% to 17.5% could add Rs. 24 billion to government revenues but will make daily communication more expensive for consumers.
Similarly, a 12.5% withholding tax on landline calls may bring in another Rs. 20 billion annually. Telecom companies are already facing operational challenges due to inflation and rising energy costs, and these new taxes could be passed on to end-users through higher call charges.
Higher Tax on Bank Cash Withdrawals
The government is also considering doubling the withholding tax on bank cash withdrawals for non-filers — from 0.8% to 1.5%. This step alone could generate nearly Rs. 30 billion per year.
However, financial experts warn that such measures could discourage people from using formal banking channels. Many small traders and individuals might return to cash-based transactions to avoid the additional deduction, which would counter the government’s goal of promoting digital banking and documentation.
Solar Panels to Face 18% Sales Tax
One of the most controversial proposals involves raising the sales tax on solar panels from 10% to 18%. This move could slow down the adoption of clean energy in Pakistan at a time when the government is promoting solar solutions under its “Green Energy Vision.”
For ordinary households, this increase could make small solar setups 15%–20% more expensive, putting renewable energy further out of reach for middle-class families. Energy experts believe this step might conflict with the government’s long-term climate commitments and net-metering incentives.
Confectionery and Processed Food Taxes
In addition to telecom and energy sectors, the government plans to expand the Federal Excise Duty (FED) to cover biscuits, chocolates, and confectionery items at a rate of 16%. Once combined with sales tax and other levies, the effective tax rate on these products could reach 38%.
This would make many everyday packaged foods more expensive, affecting both consumers and local manufacturers. The government expects to collect Rs. 70 billion annually from this measure alone.
Why IMF Is Pressuring Pakistan
The IMF program requires Pakistan to maintain a primary budget surplus of 1.6% of GDP, equal to around Rs. 2.1 trillion. To achieve this, the government must either increase taxes or reduce spending.
Despite inflation and economic hardship, the IMF has refused to lower this target. However, it may review the fiscal conditions once the final flood damage assessments are available. Until then, Pakistan is under strict observation to ensure fiscal discipline and revenue collection.
Provincial Tax Deferrals and Revenue Gap
While the federal government is trying to raise new taxes, provinces like Punjab and Sindh have postponed agriculture income tax increases of up to 45% for another year. This decision has limited provincial contributions to the national revenue pool, putting more pressure on urban taxpayers.
The FBR’s tax base remains narrow, with less than 4 million active filers in a population of over 240 million. As a result, new taxes often fall on the same taxpayers instead of bringing new individuals and businesses into the net.
Economic Outlook for 2025
Despite these challenges, there are some positive indicators. The World Bank recently revised Pakistan’s growth forecast upward from 2% to 3%, citing better post-flood recovery and improved remittance inflows.
If the FBR manages to stabilize collections and the IMF disburses the next tranche, Pakistan’s economic position could strengthen by mid-2026. However, if the tax plan fails or faces resistance, the country might risk another delay in IMF funding.
What’s Next for Pakistani Citizens
The government aims to recover at least half of the Rs. 200 billion between January and June 2026 through these tax adjustments. Officials claim the new measures are “conditional” and will only take effect if the FBR’s revenue gap widens.
Still, citizens and businesses are urged to prepare for potential increases in telecom costs, solar product prices, and bank transaction deductions starting early 2026.
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FAQs – Govt’s New Tax Plan 2025:
1. What is the reason for new taxes in Pakistan 2025?
The government is under IMF pressure to maintain fiscal balance. If revenue targets are missed, new taxes worth Rs. 200 billion will be introduced.
2. When will the tax increase take effect?
The measures may come into effect in January 2026 if the FBR’s December targets are not met.
3. How will this affect mobile users?
The tax on mobile calls may rise from 15% to 17.5%, making call rates slightly higher for all telecom users.
4. Will solar panels become expensive?
Yes. A higher sales tax of 18% could increase the overall cost of solar installations by up to 20%.
5. Who will be affected most by cash withdrawal tax?
Non-filers withdrawing money from banks will face nearly double deductions — 1.5% instead of 0.8%.
6. Are these taxes final?
No, they are contingency measures. They’ll only be enforced if revenue or spending performance falls short.
7. Why is the IMF involved in tax policy?
Pakistan’s IMF program includes strict fiscal conditions to ensure budget stability and debt repayment capacity.
8. Can taxpayers avoid higher rates?
Yes. Becoming a filer and regularly submitting tax returns can help individuals avoid higher withholding rates.
