President Asif Ali Zardari gave his assent on Friday to the Finance Bill, 2026, which outlines the budget for the upcoming fiscal year with an outlay of Rs18.8 trillion. “President Asif Ali Zardari has assented to the Finance Bill, 2026, relating to the federal budget for fiscal year 2026-27,” a post on the Presidency’s X account said. Finance Minister Muhammad Aurangzeb presented the FY2026-27 budget in the National Assembly (NA) on June 12, offering relief to higher-income salaried individuals and businesses by rationalising income tax, sales tax, and customs duties, while promoting documentation, digital compliance, and investment. The NA passed the budget on Tuesday after the opposition staged a walkout. The House approved the budget after all seven amendments moved by opposition members were rejected by a majority vote. However, the finance bill included amendments suggested by the National Assembly Standing Committee on Finance. In the new budget, income tax slabs have been eased, super tax rationalised, excise duties cut, and sales tax exemptions widened to cover magazines, shipping, and refineries, while levies on deemed income and the tampon tax have been removed. Excise duty on business class international travel has been drastically reduced in the budget, with the levy on tickets to North, Central, and South America cut to Rs50,000 from Rs350,000. Rates for tickets to the Middle East and Africa have been reduced to Rs25,000 from Rs105,000, while business-class travel to Europe now costs Rs40,000 instead of Rs210,000. The same reduction applies to tickets for the Far East and Australia, where the duty has been brought down to Rs40,000 from Rs210,000. The government has done away with the proposed 20 per cent Federal Excise Duty on mineral waters, aerated waters, hydration drinks or electrolyte beverages with artificial sweetener or sugar content below 5g/100 ml. The budget also includes permission for all airlines operating in the country to avail sales tax exemption on the import or lease of aircraft and their parts from July 1, 2027. The excise duty on imported electric cars would be calculated based on their values, to be calculated in US dollars. No FED will be applicable on electric cars and electric SUVs imported in Completely Built-Up (CBU) condition with a value not exceeding $75,000, as determined under section 25 of the Customs Act, 1969. Meanwhile, 30pc excise duty will be applicable on electric cars and electric SUVs valued between $75,000 and $110,000, while those whose value exceeds $110,000 would face 40pc excise duty. The Device Identification, Registration and Blocking System (DIRBS) tax on imported phones will now be paid in instalments, but all instalments have to be paid before the end of the financial year in which the import is made. Persons having turnover up to Rs200 million may opt out of the fixed tax regime, subject to a final and irrevocable certificate filed with the Tax Commissioner before filing their returns for the tax year 2027. The minimum rate of value addition tax shall be one per cent in the case of import of coal, subject to the conditions that such imported coal is exclusively and directly supplied to Independent Power Producers. Under the new budget, income tax exemptions would be available on any income derived by a private equity and venture capital fund registered under Private Funds Regulations, 2015. This will be applicable where not less than 90pc of the accounting income of that year, as reduced by accumulated losses and unrealised capital gains, is distributed by the private equity and venture capital fund to its unit or certificate holders or shareholders. This exemption will not be available if the private equity and venture capital fund is established to acquire a public listed company, whose status has not been changed to private limited company on the acquisition. In addition, the finance bill states that for steel melters, re-rollers and composite units, tax will be collected on the basis of per unit electricity consumed, including use of electricity produced by a captive power plant or through any other alternative source of energy at the rate or rates as prescribed by FBR. The tax so collected shall be an adjustable input tax, to be claimed in the return of the month in which such payment is made. The per unit sales tax shall be determined by the FBR on the basis of minimum notified price and the industrial benchmarks of consumption of electricity against per ton production of steel products.
Source: Original report
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