Govt Officially Notifies Budget 2026-27

The federal government has issued the gazette notification for the Finance Act 2026, making the new budget measures effective from July 1 with changes to taxes, customs duties, and other fiscal policies.

Under the Finance Act, revised advance tax rates on property transactions will come into effect from the start of the new fiscal year.

Sellers will pay an advance tax of 2.75 percent of the gross sale amount, while buyers will be subject to an advance tax of 1.25 percent of the property’s fair market value.

The government has also introduced a 10 percent tax on the income of banking companies and fertilizer manufacturers exceeding Rs. 150 million.

Corporate entities with annual income above Rs. 500 million will be subject to an 8 percent tax.

Beginning July 1, a 0.5 percent withholding tax will also apply to international transactions made through credit and debit cards.

The Finance Act further reduces customs duties on imported vehicles with engine capacities ranging from 850cc to 1,800cc by between 35 percent and 50 percent. Customs duties on auto parts have been reduced by 10 percent, while duties on motorcycles have been cut by 20 percent under the revised auto policy.

Additional customs duties on the auto sector, vegetable oil, gold, silver, and mobile phones have also been reduced by 2 percent.

According to the government, the reduction and elimination of additional customs duties will lower revenue collections by Rs. 47.06 billion, while cuts in regulatory duties are expected to reduce revenue by another Rs. 65.57 billion.

The Finance Act 2026 was approved by the National Assembly before receiving the president’s assent.

Following the issuance of the gazette notification, the law has formally come into force, and all budgetary measures for the fiscal year 2026 and 2027 will be implemented from July 1.