The federal government has introduced major tax reforms in the 2025–26 budget, focusing on increasing revenue and curbing tax evasion. One of the key changes is the increase in the sales tax on small vehicles. Cars with engine capacities up to 850cc — including petrol, diesel, and hybrid models — will now be uniformly taxed at 18%, replacing the previously lower rates applied to some variants. The move is aimed at simplifying and standardizing the tax structure for the auto sector.
In addition, a robust crackdown has been launched on unregistered businesses. To ensure tax compliance, authorities will now impose stringent penalties on entities operating outside the formal tax system. These penalties include freezing of bank accounts, restrictions on property transfers, sealing of business premises, and confiscation of goods in cases of serious non-compliance. However, affected parties will retain the right to appeal within 30 days.
As part of broader fiscal reforms, the government is also targeting passive income sources. The tax on interest income is set to rise from 15% to 20%, though this increase will not apply to investments in national savings schemes.
Efforts to regulate the digital economy are also included in the new budget. E-commerce businesses will be required to charge taxes on digital transactions and submit detailed monthly reports on their sales and tax collections. This measure aims to bring digital platforms into the formal tax net and enhance revenue collection from online commerce.
These initiatives reflect a wider strategy to expand the tax base and promote transparency in both traditional and digital business sectors.
