The Federal Budget 2025–26, unveiled on Tuesday, signals a significant policy shift with a strong focus on tightening financial regulations for non-filers. Presented by Finance Minister Muhammad Aurangzeb, the budget proposes a range of measures aimed at broadening the tax base and formalizing the economy.
One of the most notable proposals is the increase in advance tax on cash withdrawals by non-filers—from 0.6% to 1%. This move, while expected, underscores the government’s commitment to penalizing non-compliance. Even more striking is the proposal to eliminate the distinction between filers and non-filers in various financial transactions, essentially making tax compliance a prerequisite for participation in the formal economy.
The restrictions don’t stop there. Non-filers may soon find themselves locked out of significant financial activities, including the purchase of vehicles and immovable property, as well as investments in securities and mutual funds. Perhaps the most impactful of all is the proposal to bar non-filers from opening bank accounts—an aggressive step that could substantially curb undocumented financial flows.
Overall, the budget marks a clear message: tax compliance is no longer optional. While these measures may face pushback from segments of the population, they represent a firm push toward greater transparency and accountability in Pakistan’s financial landscape.
