Budget 2025-26: After sugar, FBR sets its sights on tobacco sector

Published
0
Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial speaks during a media briefing in Islamabad on June 11, 2025, a day after presenting the 2025–26 fiscal budget. — AFP
Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial speaks during a media briefing in Islamabad on June 11, 2025, a day after presenting the 2025–26 fiscal budget. — AFP

• Langrial says new 15pc tax rate on passive income aims to address disparity with active business earnings
• Political leadership and intel agencies’ help enlisted to ensure compliance, root out corruption

KARACHI: Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial on Wednesday detailed a sweeping overhaul of the country’s tax compliance system, vowing to crack down on non-compliant sectors, expand digital monitoring, and address longstanding loopholes in the tobacco, retail and passive income tax regimes.

Speaking to Geo News, Mr Lan­g­rial said that the government’s re­­cent enforcement drive in the sugar sector had resulted in a 39 per cent increase in tax collection without any change in tax rates, and that si­­milar measures are now being rol­led out across other key industries.

“The story of non-compliance in the tobacco sector will fundamentally change, just as it did in sugar,” he said.

He acknowledged that raising tax rates on the formal sector often led to market erosion by the informal sector, but said the government’s solution is to target non-compliant businesses directly.

“Sugar mills that were non-compliant have gone out of business due to our monitoring. We are now achieving almost 100 per cent compliance in most parts of the country,” Mr Langrial said.

He also revealed that the Intelligence Bureau was tasked with monitoring FBR teams to prevent collusion and corruption. “Thanks to the IB, we took several actions against black sheep within our own ranks,” he said.

Mr Langrial said similar monitoring has begun in the poultry sector, where initial checks revealed significant under-reporting of production and tax evasion. “One month of monitoring revealed millions of rupees in income tax evasion,” he said.

On the issue of passive income, Mr Langrial said a new 15pc tax rate on passive income, compared to 29pc on active income, in an effort to address the bias against business investment and encourage investment.

Mr Langrial also addressed comparisons between the salaried and construction sectors, noting that such comparisons are misleading.

“There exists a salaried sector inside construction, and sectors can’t be compared with types of income,” he said, emphasising the complexity of tax policy across different industries.

“We are saying that a person who has Rs50 million in the bank will be taxed at 15pc. This is an attempt to address the discrimination between active and passive income,” he said.

Published in Dawn, June 12th, 2025

Opinion

Editorial

Kashmir unresolved
Updated 30 Sep, 2026

Kashmir unresolved

The just solution lies in India addressing the issue through a trilateral dialogue involving the legitimate representatives of the Kashmiri people and Pakistan.
Water shortage
30 Sep, 2026

Water shortage

THAT the country is entering the Rabi season with an anticipated water shortage of nearly 25pc, the lowest carryover...
Young hearts
30 Sep, 2026

Young hearts

THE observance may have passed, but the message of World Heart Day should not fade with it. The occasion is a useful...
Terror and politics
Updated 29 Sep, 2026

Terror and politics

There is an urgent need to tone down the rhetoric and tackle terrorism as a collective challenge for both the affected provinces and the federation.
Watching the glaciers
29 Sep, 2026

Watching the glaciers

THE latest signs from Pakistan’s mountains are worrying. Suparco says the number of unfrozen glacial lakes it...
Dangerous agenda
29 Sep, 2026

Dangerous agenda

AS the world remains fixated on the US-Iran conflict, elsewhere in the Middle East, Israel is consolidating its grip...