ISLAMABAD: The federal government has issued the gazette notification for the Finance Act 2026-27, paving the way for the implementation of the federal budget from July 1, the start of the new fiscal year.
Under the Finance Act, all tax measures, customs duties and fiscal decisions announced in the 2026-27 budget will come into force from Tuesday.
The government has reduced the advance tax on property transactions. From July 1, sellers will pay an advance tax of 2.75% of the transaction value, while buyers will be subject to an advance tax of 1.25% of the property’s fair market value.
A 10% tax will also be imposed on the income of banking companies and the fertiliser sector exceeding Rs150 million, while corporate entities earning more than Rs500 million annually will be subject to an 8% tax.
In addition, a 0.5% withholding tax will be levied on international transactions made through credit and debit cards.
The Finance Act also introduces reductions in customs duties across several sectors. Customs duty on vehicles with engine capacities ranging from 850cc to 1,800cc has been cut by 35% to 50%, while duties on auto parts and motorcycles have been reduced by 10% and 20%, respectively.
Additional customs duty on the auto sector, vegetable oil, gold, silver and mobile phones has also been reduced by 2%. The government estimates that lowering and abolishing additional customs duties will reduce revenue by Rs47.06 billion, while cuts in regulatory duties are expected to lower revenue by another Rs65.57 billion.
The Finance Act became law after being passed by the National Assembly, signed by the president and published through an official gazette notification. The new budget measures will formally take effect from July 1, 2026.
