• Targets streaming platforms, gaming, digital media, second-home ownership, corporate ads
• Advocates carbon and pollution levies for industries

ISLAMABAD: The Institute of Cost and Management Accountants of Pakistan (ICMA) has proposed new levies in the coming Budget 2026-27, including taxes on digital services, online and speculative gaming, corporate brand promotion, and second-home ownership, to expand the country’s struggling tax base.

In its new taxation measures, submitted to the Tax Policy Office (TPO) of the Ministry of Finance, the statutory body of accounting and management professionals, said the proposals had been developed after careful analysis of Pakistan’s economic priorities, sectoral challenges, and international best practices to broaden the tax base and formalise emerging sectors.

The proposals are organised under seven key segments, including new revenue initiatives to broaden the tax base, climate and green taxation, urban and transport revenue, corporate and financial services, formalising digital and informal economy for tax revenue, agriculture and rural income and wealth and luxury tax.

The ICMA proposed a Digital Services Tax to capture revenue from Pakistan’s rapidly growing digital economy, including streaming platforms, gaming, mobile applications, and other digital media. This measure, it said, would formalise digital business activities, ensure equitable contribution to public revenue, and strengthen fiscal resources. The expected impact is to encourage compliance, formalisation of the digital sector, and alignment with international best practices.

It also proposed a regulated licencing and taxation framework for online and speculative gaming, which is largely unregulated and accessed via offshore platforms. ICMA recommended that only licenced operators should be allowed to operate under government oversight, paying a 2pc tax on gross revenues. This measure will convert informal and illegal activity into a legally monitored and taxed sector, protect consumers, and create a stable revenue source.

To leverage corporate visibility and turnover, ICMA recommended a dedicated levy on corporate advertising and brand promotion spending, applicable to enterprises with turnover above Rs100 million. By using existing invoices maintained by advertising agencies, this approach would ensure minimal administrative burden. This will result in increased transparency, equitable contribution from large enterprises, and additional revenue for public programs.

It also suggested Additional Resi­dential Property Tax (ARPS) targeting second homes or investment properties valued at Rs20 million and above. First-time buyers and primary residences should remain fully exempt. Buyers should be required to declare ownership of other residential properties at the time of registration. This will discourage speculative property purchases, promote efficient use of housing stock, and enhance housing equity.

Another proposal pertains to the nationwide adoption of Building Information Modelling (BIM) to streamline planning, approvals, and monitoring of infrastructure projects, both public and private. By digitising project management, BIM will improve efficiency, reduce delays, and increase transparency in construction projects.

Green Building Incentives are proposed to promote energy efficiency and water conservation. Certified green buildings should receive a 1.5pc concessionary tax on financing costs and rental income, encouraging sustainable construction practices.

To improve commercial building safety, ICMA recommended a Commercial Building Safety Levy (BSL) of 0.25pc on commercial property transactions, excluding residential properties.

For long-standing tax disputes, ICMA proposed a one-time settlement scheme that allows taxpayers to resolve disputes by paying a reduced percentage of the disputed amount. This will provide a final resolution, encourage voluntary compliance, and free FBR resources for active enforcement.

Proposals also include a Financial Transaction Tax (FTT) on equities, derivatives, and digital asset trades to generate revenue from financial markets while leveraging existing reporting infrastructure to minimise compliance costs.

The ICMA also proposed the National Consumer Receipt Lottery to encourage the formal documentation of retail sales. Consumers who obtain verified receipts should have a chance to win periodic cash prizes, thereby strengthening voluntary compliance, formalising retail activity, and creating a predictable revenue stream.

Finally, the ICMA also proposed a Windfall Gains Tax on extraordinary profits in sugar, oil & gas, and fertiliser sectors during periods of global price surges. This temporary levy is expected to ensure that the public benefits from exceptional gains by companies without affecting their normal profits.

Climate and green taxation

To promote sustainable development, ICMA proposed property tax relief for EV charging operators, providing an 80pc reduction for the first five years and 50pc for the next five years to encourage private investment in grid-compliant public and commercial EV charging stations, expand electricity consumption, and support Pakistan’s climate and EV adoption targets.

Also, it demanded a Landfill Disposal Tax to reduce municipal and industrial waste dumping while generating green revenue. Rates are proposed at Rs15,000 per tonne for general non-hazardous landfill waste and Rs1,000 per tonne for inert or partially treated waste.

ICMA also proposed a Progressive Carbon and Pollution Levy (PCPL) for large industrial units, under which higher-emitting industries pay a proportionally larger share. Revenue generated will fund environmental protection, pollution mitigation, and public health initiatives. This would encourage cleaner production and low-carbon technologies, and supports sustainable industrial growth.

The Green Transport Levy (GTL) of 2pc on fuel purchases, high-emission vehicle registration, and transport-related emissions has been proposed to fund low-carbon mobility, incentivise cleaner vehicles and fuels, and generate dedicated funding for green transport projects.

To formalise carbon markets, ICMA recommended a Carbon Market Levy for businesses participating in carbon trading or offset programs. Administration would be coordinated by the Environmental Protection Agency and registered trading platforms.

Published in Dawn, March 18th, 2026