New Taxes on Mutual Funds and Poultry Announced in the Mini Budget 2025-26

The federal government has unveiled new taxes on mutual funds and poultry in the 2025-26 budget, Finance Minister Muhammad Aurangzeb announced during his address to the National Assembly on Monday.

In a bid to broaden the tax base, the government introduced three additional proposals, including a significant increase in levies targeting corporate earnings and the poultry sector.

“First, the tax on income earned from the debt portion of mutual funds by companies will rise from 25% to 29%,” Aurangzeb stated. “Second, a 20% tax is proposed on corporate profits derived from investments in government securities.”

New Federal Excise Duty on the Poultry Sector

Aurangzeb further said a Federal Excise Duty (FED) of Rs 10 per chick will now apply to day-old hatchery chicks. “This ensures that the poultry sector also plays its part in contributing to the national exchequer,” he added.

These new taxes on mutual funds and poultry are part of a broader fiscal framework that aims to maintain expenditure controls while enhancing tax compliance and collection.

The finance minister emphasized that despite the challenges, the government has presented a “balanced” budget. He highlighted key relief measures, including income tax cuts for the salaried class and reduced GST on solar panel imports from 18% to 10%.

Wider Tax Policy Adjustments and Reforms

The government also introduced targeted relief for pensioners, exempting those above 75 years from all taxes and placing new taxes on annual pensions above Rs 10 million.

Additionally, measures have been taken to safeguard taxpayers’ rights. FBR’s authority to arrest in tax fraud cases has been revised to include stricter judicial oversight, including court warrants and a high-level committee’s approval for any arrest over alleged fraud below Rs50 million.

Real Estate and Compliance Updates

Addressing concerns from the real estate sector, Aurangzeb confirmed that the new ineligibility rule under Section 114C of the Income Tax Ordinance will not apply to residential properties worth up to Rs50 million, commercial properties up to Rs100 million, or vehicles under Rs7 million.

As geopolitical tensions escalate in the region, the finance minister assured lawmakers that the government is prepared to mitigate any economic fallout.