ISLAMABAD: Pakistan’s Finance Act amendments for FY2026-27 propose new tax exemptions, vehicle levies and stricter digital enforcement measures from July 1.
The proposed Finance Bill gives Pakistan International Airlines a 15-year sales tax exemption on aircraft purchases. It also proposes a reduced 10pc sales tax on children’s stationery, including pencils, pens and sharpeners.
PwC Pakistan said proposed Finance Bill 2026 changes are generally effective from July 1, subject to approval by the National Assembly and presidential assent. EY said the bill covers income tax, sales tax, federal excise duties and changes to customs law. In addition, the bill focuses on compliance and digital reporting.
Under the draft vehicle tax structure, a one-time fixed tax of Rs10,000 will apply to vehicles up to 1000cc in the federal area. Moreover, pre-2010 cars up to 1000cc will face Rs20,000 token tax. However, post-2010 models will face Rs6,200, up from Rs1,500.
For vehicles between 1001cc and 1300cc, a token tax of 0.3pc of the invoice value will be charged. Higher slabs will be subject to revised valuation rules under the proposed framework.
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The draft also approves amendments to Section 182 of the Income Tax Ordinance 2001. Tax liability may be based on current taxable income or the highest tax assessed over the past three years. It will be whichever is higher.
Businesses that fail to install the prescribed FBR electronic monitoring systems may face fines of up to Rs1 million per offence. Business Recorder reported that penalties for failure to install prescribed electronic monitoring equipment could rise to Rs2 million for repeat defaults.
Tampering with or damaging the FBR’s electronic monitoring infrastructure may carry a sentence of up to 5 years in prison. The FBR will also offer rebates of up to Rs30 million to businesses that install approved electronic monitoring systems.
From July 1, all income tax returns must be filed electronically through the FBR Iris system. Companies will also have to submit financial statements in machine-readable formats under the proposed digital reporting rules.
