What’s New in FBR 2025? Key Tax Updates Every Business Should Know

The tax landscape in Pakistan is shifting fast, and 2025 has brought several important changes that every business — whether small, medium, or growing — needs to understand. The Federal Board of Revenue (FBR) has tightened compliance rules, updated tax rates, and introduced new digital processes to make the system more transparent. Here’s a clear breakdown of what’s new and how it affects your business.

1. Higher Focus on Documentation & Compliance

FBR’s biggest push in 2025 is simple: document everything.
The Finance Act 2025 has introduced stricter rules on claimed expenses, especially those paid in cash or without a proper paper trail.

• Cash-based expenditures over set limits may be partially disallowed.

• Purchases from suppliers without NTN can lead to disallowed expenses.

• FBR officers now have the authority to monitor business premises more closely in high-risk sectors.

For businesses that rely heavily on cash transactions, this means the old informal system won’t work anymore. Shifting to proper invoicing and digital payments is now essential.

2. Changes in Withholding Taxes & Digital Payments

One of the key updates is the rise in withholding tax on cash withdrawals for non-filers — increased from 0.6% to 0.8%.
This is part of FBR’s strategy to push businesses away from cash and toward digital payments.

Digital transactions also have new tax rates:

• Domestic digital payments now fall in the 0.25% to 2% final tax bracket.

• Foreign-operated online platforms will be charged a 5% digital levy.

If your business sells online or uses digital wallets, you will see these changes directly.

3. New Digital Return System & Foreign Asset Declaration

To simplify filings, FBR has introduced new electronic tax return forms for individuals, SMEs, and companies. These forms aim to make submission easier, especially for small businesses.

Additionally, resident individuals must now declare any foreign income or assets electronically. This new rule is part of Pakistan’s commitment to improving tax transparency and combating hidden overseas wealth.

4. Updates for Salaried & Property Income

There are a few changes that affect individuals and companies involved in property:

• The surcharge on salaried individuals has been reduced from 10% to 9%.

• Commercial properties now require a minimum 4% rent calculation for tax purposes.

• Property-related losses can no longer be adjusted against business income in the same year.

These changes can affect tax planning, especially for businesses holding commercial properties.

5. Deadline Extensions & Future Outlook

For tax year 2025, FBR has extended the return filing deadline to October 15, 2025, giving businesses more time to adjust to the new system.

Despite a significant revenue shortfall, FBR has stated that no emergency tax measures will be introduced for now. Instead, the focus will remain on expanding the tax base and improving compliance through digital reforms.

Conclusion

FBR’s 2025 updates signal a shift toward tighter documentation, digital payments, and greater transparency. For businesses in Pakistan, staying compliant isn’t just about avoiding penalties — it’s now a key part of growth and stability.
Keeping track of these changes, upgrading your systems, and consulting professionals when needed will help you stay ahead in this new tax environment.