Islamabad: President Asif Ali Zardari has approved the Finance Act 2026, paving the way for a wide-ranging package of tax, tariff and enforcement measures to take effect from July 1, 2026.
The Finance Act is designed to help the government achieve its tax collection target of PKR 15,264 billion for the 2026-27 fiscal year through revenue measures worth an estimated PKR 1.02 trillion, largely relying on indirect taxes, withholding taxes and stronger enforcement.
The National Assembly Secretariat forwarded the Finance Bill to the President after its passage in Parliament. The President signed the legislation on the advice of the Prime Minister, and the approved copy has been returned to the Secretariat.
The Act also provides import-stage tax relief estimated at PKR 143.4 billion through reductions in Customs Duty, Additional Customs Duty and Regulatory Duty, along with revisions to exemptions under the Fifth Schedule. The tariff changes cover thousands of import tariff lines and remove several redundant exemption entries.
Among the major revenue-generating initiatives are the Taxpayer Services and Facilitation Enhancement Programme, expected to generate PKR 144 billion, expansion of the Third Schedule of the Sales Tax Act (PKR 91 billion), the Faceless Auto Tax Office and algorithmic settlement measures (PKR 85 billion), and the Production Data Integration and Real-Time Sectoral Verification Framework (PKR 85 billion).
Other key measures include the Retailer Formalisation and POS Integration Scheme (PKR 82 billion), the Supply Chain Digitalisation Policy (PKR 75 billion), a windfall tax on refineries (PKR 36 billion), a federal excise duty of PKR 80 per litre on certain petroleum products used for adulteration (PKR 29 billion), and higher withholding taxes on selected transactions.
The Finance Act also introduces a special excise duty on luxury goods and high-end electric vehicles, higher minimum taxes for selected sectors, revised withholding tax provisions, and the expiry of certain tax exemptions, including reduced sales tax on hybrid vehicles and tax concessions for imports into tribal areas.
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