The federal government is set to unveil the 2025–26 budget today, with a strong focus on expanding the tax net and cracking down on non-filers through a series of stringent reforms.

According to official sources, the proposed budget includes financial, commercial, and travel restrictions targeting individuals who are not registered tax filers.

One of the key proposals is a ban on foreign travel for non-filers. Additionally, the withholding tax on cash withdrawals exceeding Rs50,000 is expected to be doubled from 0.6% to 1.2%.

While mobile phone SIMs and internet devices of non-filers will not be blocked, existing restrictions on the purchase of vehicles and real estate will remain in effect.

Non-filers will also be barred from conducting financial transactions, purchasing shares, or investing in mutual funds.

Sources further indicated that the government is working to eliminate the non-filer category altogether, aiming to encourage universal tax compliance.

In another major move, enforcement against tax evasion via Point of Sale (POS) systems is set to intensify.

The budget proposes a tenfold increase in penalties for violations raising fines from Rs500,000 to Rs5 million.

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Businesses offering unreported cash discounts or alternate pricing will also be brought into the tax net.

These measures are expected to be implemented under Section 114B of the Income Tax Ordinance, 2001, pending parliamentary approval of the budget.