The bill includes revised income tax slabs, changes to import duties on vehicles and property taxation
The National Assembly on Tuesday passed the Finance Bill 2026-27 after a clause-by-clause consideration by rejecting all the amendments presented by the opposition.
Minister for Finance Muhammad Aurangzeb moved the motion for consideration of the Finance Bill. 2026-27 to give effect to the financial proposals of the federal government for the year, commencing on July 1, 2026. 63 amendments moved by the opposition in seven clauses of the Finance Bill 2026 were rejected by a majority vote.
Backed by first-ever provincial grants of over Rs1 trillion, Aurangzeb on June 12unveileda Rs18.8 trillion federal budget, proposing to significantly reverse punishing taxes imposed on the salaried class. the real estate sector while deepening economic liberalisation. It was the fifth budget that Prime Minister Shehbaz Sharif oversaw since 2022. the third of his current five-year constitutional term.
According to the Finance Bill 2026-27, revised income tax slabs have been introduced for salaried individuals, while new levies. exemptions will apply to corporate entities, property transactions and digital income streams, including earnings from social media platforms.
قومی اسمبلی نے فائنانس بل 2026 کی منظوری دے دیاپوزیشن کی جانب سے پیش ہونے والی تمام ترامیم مستردpic.twitter.com/O0EUf1kUpA
Under the new structure. individuals earning up to Rs600,000 annually will remain exempt, while higher income brackets will be taxed progressively, with rates rising up to 35 per cent for annual incomes above Rs7 million.
The legislation also introduced changes to property taxation, including advance taxes on both buyers. sellers, alongside new withholding tax provisions on digital earnings.
Read:Budget 2026-27: FinMin projects 4% growth as govt unveils fiscal, tax and reform agenda
Significant amendments were also approved for corporate taxation, including revised rates for banking, fertiliser. large corporate sectors, depending on income thresholds.
The bill further included changes to import duties on vehicles. with reduced overall tax burdens on certain engine capacities, while higher duties have been imposed on selected imported electric vehicles based on value brackets.
In the agriculture. industrial sectors, income above specified thresholds will now be taxed at revised flat rates, while exemptions have been granted to selected welfare and charitable institutions, including the Pakistan Red Crescent Society and other named organisations.
The House also approved stricter enforcement measures for tax compliance, including heavier fines for non-filers. individuals failing to comply with Federal Board of Revenue (FBR) notices. Penalties of up to Rs 1million for first violations and Rs 2million for repeat offences have been introduced.
The legislation further strengthened digital tax monitoring. making electronic filing of income tax returns mandatory through the FBR’s online system, while also introducing penalties, including imprisonment, for tampering with monitoring systems.
The National Assembly adjourned the session until 11am on Wednesday.
The Rs18.8 trillionexpansionary budgetwas 20% or Rs3.1 trillion higher than the outgoing fiscal year's revised outlay. indicating the government's intentions to shift the gear from consolidation to spending.
Despite significant contributions by four provinces, the federal government has announced a Rs7 trillion deficit, which is higher than this fiscal year. will be filled by taking more loans. The government also plans to get $23.4 billion in foreign loans, including $2 billion through Euro and Panda bonds.
Read More:NA sees heated budget debate
The Finance Bill 2026-27 was aimed at striking a balance between reversing the injustice being meted out to the salaried class, helping the real estate sector to kick-start the business,. lowering the tax burden of the corporate sector. The income from social media was once again targeted by imposing a 5% income tax.
The government has proposed a total of over Rs306 billion worth of tax measures in the budget,. also gave Rs360 billion worth of relief. In addition, the government has proposed Rs354 billion worth of enforcement measures. But the FBR's tax-to-GDP ratio would remain around 10.5% in the next fiscal year.
The petroleum. carbon levy targets have been set at Rs1.748 trillion for the next fiscal year on the back of Rs80 per litre levy. The minister also announced a 7% increase in salaries and pensions, which did not make the public sector employees happy.
For the first time. three provinces, except for Balochistan, have given Rs1.035 trillion in grants to the FBR on the basis of a Rs15.264 trillion target. In case of any slippage, the grant amount would automatically reduce. The finance minister said that the provincial shares would be determined on the basis of Rs13.35 trillion in taxes,. the additional amount of Rs1.9 trillion would go to the federal government, including Rs1.035 trillion provincial share.
For the next fiscal year, four provinces would get a combined Rs8.85 trillion,. out of this Rs1.035 trillion would return to the federal kitty in grants. Punjab would get Rs4.4 trillion but would donate a significant amount of it to the Centre. Sindh would get Rs2.2 trillion. Khyber-Pakhtunkhwa would get Rs1.44 trillion in gross, including the grants.
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