The proposed national budget for the fiscal year 2025–26 includes a reduction in source taxes on mobile operator services and internet usage, paving the way for lower consumer expenses in these sectors.

While presenting the new budget on Monday, Finance Adviser Salehuddin Ahmed announced a reduction in source tax on internet services from 10 percent to 5 percent.

Besides, the turnover tax for mobile operators has been cut from 2 percent to 1.5 percent.

These proposals have been introduced under the Finance Ordinance 2025, aimed at addressing inconsistencies in the tax structure and broadening the tax net.

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Despite the expected drop in mobile and internet costs, expenses related to Over-the-Top (OTT) platforms are set to increase.

The proposed budget includes a definition for OTT services and imposes a 10 percent supplementary duty on such platforms. As a result, viewers will have to pay more to watch dramas, films and series on OTT services.

Salehuddin emphasised that the budget size has been kept smaller to align with economic realities and reduce the deficit.

The adviser also noted that there are efforts in the budget to provide some relief to lower-income groups amidst ongoing political unrest.

As there is no parliament, the President is expected to sign the budget ordinance on June 30, with the new budget coming into effect from 1 July.

Several elements of the budget, particularly those related to taxation and customs, will take effect from the day of its presentation on June 2.