Budget 2025–26: Major Relief Expected for Construction Sector, Super Tax Cuts Likely

The upcoming Federal Budget 2025–26 is likely to offer tax relief to the construction and industrial sectors, with notable reductions in super tax and import duties, sources revealed on Monday.

Over 3,500 imported items may see a reduction in additional regulatory duties, while customs duty on industrial raw materials is expected to drop by 2% to 3%. Proposals are also under review to reduce or abolish the withholding tax on raw material imports, easing the burden on local industries.

A phased reduction in super tax is also anticipated for high-earning companies. While companies with Rs150 million in annual profit will stay exempt, those earning Rs200 million may see the super tax cut from 1% to 0.5%. Companies earning Rs250 million could benefit from a drop from 2% to 1.5%, while the 4% rate on Rs300 million-plus earnings will likely remain unchanged.

The construction sector is set to gain significantly through reduced import duties on raw materials and lower withholding tax, providing a much-needed boost to housing and infrastructure development.

However, the auto industry may face setbacks. GST on locally manufactured vehicles with engines up to 850cc is expected to increase from 12.5% to 18%, a 5.5% hike that could impact affordability for small car buyers.