He disputed allegations that the government had considering taxing solar panels before the budget. ‘There was never any such demand from the IMF and the topic was never discussed,’ he said.

Aurangzeb stated in a media interaction that the government is working on a set of structural reforms in the energy sector to bring down electricity rates, improve the business environment and increase the competitiveness of major industries, according to a federal minister.

In reply to questions on the high energy costs and capacity charges carried over by successive governments, the minister said expensive power continues to pose a serious problem to industry including manufacturing, information technology, mining and other energy-intensive industries.

He said the government, in partnership with Energy Minister Awais Leghari, had already taken steps to remove cross-subsidies for industry and was pursuing changes through wheeling policy and other measures to increase efficiency in the electricity sector.

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The government is moving from short-term relief to more extensive, long-term structural reforms, the minister said. These efforts are to be expected to bear fruit in the coming years rather than immediately, he said.

Privatisation of energy distribution companies (DISCOs) is a crucial part of the reform agenda. The minister said three DISCOs had already been awarded expression of interest (EOI) and two more EOIs will soon be awarded. He said he was certain that the first batch of distribution businesses would be handed over to private sector management by the end of the year, with the rest to follow in phases.

There would need to be more regulatory control to accompany privatisation and work was beginning to ensure the regulatory system would be robust and effective, he said.

He also emphasised the ambitions to shift away from the existing single-buyer energy market model, controlled through the Central Power Purchasing Agency (CPPA), to a competitive multi-buyer system. “The change will help dismantle existing monopolistic structures and improve market efficiency,” he said.

The federal government has proposed in the Finance Bill 2026 to impose a 5% withholding tax on revenue received by social media influencers through digital platforms like YouTube, Facebook, Instagram and TikTok.

The draft legislation states that banks and non-banking financial institutions will have to deduct the tax anytime payments related to social media profits are credited or received in an account.

The bill defines a social media influencer as someone who earns money through social media. The plan includes payments for domestic remittances, transfers and direct credits to accounts tied to digital content development and online activity.

The proposed framework proposes that resident individuals active tax payers will be subject to 5% withholding tax on their social media revenue. Non-resident persons and entities that earn revenue through such platforms will be subject to the same rate.

The Finance Bill provides that the withholding tax shall be the minimum tax liability for resident tax payers. Where there is no permanent establishment of a non-resident in Pakistan, the sum so deducted shall be deemed to be a final tax.

The plan is part of the federal budget for FY 2026-27, which was presented by Finance Minister Muhammad Aurangzeb in the National Assembly on Friday.

The government has recommended a total budget outlay of Rs18.771 trillion including Rs8.054 trillion for debt servicing Rs3 trillion for security spending and Rs1 trillion for the federal development project.

– The Federal Board of Revenue (FBR) has put forward a host of substantial tax initiatives to augment revenue in the Budget 2026-27.

The tax collection target for the upcoming fiscal year was fixed at Rs15,264 billion and the budget was expected to include about Rs650 billion in additional levies, including nearly Rs150 billion in new taxes, sources said.

The proposed idea may apply sales tax on hundreds of retail-packed commodities, including milk, baby formula and other dairy products.

Other items such as ghee, cooking oil, sweets, pasta and several spices have also been recommended to be included under the 18% General Sales Tax (GST) regime.

The suggestions also include taxation of retail-packed agricultural inputs, insecticides, plastic household products, kitchenware, storage items, bags, suitcases and other travel goods.

Other items projected to come under the sales tax net are bathroom fittings, sanitary equipment and domestic accessories like crockery, as well as all forms of footwear.

In the auto sector, the proposal is to tax the retail sales of autos and motor parts. Luxury SUVs costing between Rs20 million and Rs30 million could be taxed at 30%, while those beyond Rs30 million could be taxed at 40%.

There is also a proposal to levy a 5% tax on purchases from unregistered suppliers and to boost the tax rate on distributors from 0.25% to 0.50%. Under the current idea, commercial importers that sell imported raw materials could also be taxed at 3%.