ISLAMABAD – The National Assembly has approved the federal budget for FY2026-27 without opposition, introducing wide-ranging fiscal, tax and development measures effective from July 1, 2026.
The government has set GDP growth target at 4% with inflation projected at 8.2%, while FBR revenue target has been fixed at Rs15,264 billion, up 17.6% year-on-year. Total federal expenditure stands at Rs18,771 billion, including Rs8,054 billion for debt servicing.
Defence allocation has been raised to Rs3,000 billion, while the Public Sector Development Programme is set at Rs1,000 billion, with overall development spending at Rs3,675 billion.
Social protection under BISP has been increased to Rs838 billion, covering 12 million families and education stipends for 9.2 million children. The PM Apna Ghar scheme has been allocated Rs71 billion.
Tax relief measures include reductions in income tax for salaried individuals, proposed removal of the 10% surcharge, and business tax cuts including lower super tax.
Relief has also been extended to exporters, IT sector, property transactions, and foreign card payments, while some levies such as Capital Value Tax on financial assets are proposed for abolition.
Development priorities include transport, energy, water, housing, and urban infrastructure, with major projects such as ML-1 Karachi–Rohri, Diamer-Bhasha Dam, Mohmand Dam, and K-IV receiving funding.
Salary and pension hikes of 7% each and a 10% increase in minimum wage have been proposed, alongside EV incentives, privatization of state entities, and expansion of digital economy initiatives.
Further details of implementation and tax procedures will be issued through official notifications.
| Area |
Original Finance Bill |
Standing Committees Version |
| Imported mobile phones |
No facility to pay PTA/DIRBS tax in installments |
Individuals may be allowed to pay imported phone tax in installments, provided installments are cleared before the end of the financial year |
| Mobile phone tax rates |
Existing Ninth Schedule rates were not revised |
Rates are still not reduced or revised; only the installment facility is added |
| Petroleum levy framework |
Proposed detailed rules for petroleum and carbonated support levies, including reporting, recovery and late-payment surcharge |
The entire proposed amendment package has been removed |
| Life insurance and takaful payouts |
Tax exemption applied only after completing seven years |
Exemption will apply after four years. The 10% tax will now cover payouts after one year but before four years |
| Social media income tax |
5% for resident persons on the ATL and 5% for non-residents |
Rate follows tax return filing status only, removing ATL/non-resident distinction from the rate wording |
| Section 6A fixed-tax regime |
Tax became adjustable where turnover exceeded Rs. 200 million |
Persons with turnover up to Rs. 200 million may also opt out through a final and irrevocable certificate for Tax Year 2027 |
| Failure to integrate with FBR |
Up to 5% of expenditure could be disallowed |
Disallowance reduced to 3% of expenditure |
| Export-oriented businesses |
No corresponding exemption |
Super tax under Section 4C will not apply where export proceeds exceed 80% of total turnover |
| Private equity and venture-capital funds |
No new exemption in the original proposal |
Income exemption introduced where at least 90% of accounting income is distributed, subject to conditions |
| Airline imports |
Sales tax exemption was limited to PIA |
Exemption extended to aircraft and parts imported or leased by any Pakistan-registered airline, effective July 1, 2027 |
| Coal imported for power producers |
No special 1% minimum value-addition rate |
Minimum value-addition tax fixed at 1% where imported coal is supplied directly and exclusively to IPPs |
| FBR sharing tax return data |
FBR could share sectoral sales-tax return data among registered businesses under non-disclosure agreements |
This proposed power has been removed |
| Customs penalty |
Certain customs penalty proposed to rise from Rs. 500,000 to Rs. 10 million |
Increase reduced to Rs. 5 million |
| Independent scrutiny committees |
No provision for a chartered accountant as a member |
Committees may co-opt a chartered accountant as a non-voting member; limitation periods are also protected during committee review |
| Appointment of external auditors |
Taxpayer had not stated right to object to FBR’s first nominee |
Taxpayer may object within 15 days; then FBR may appoint another auditor at its discretion |
