Finance Bill 2026 Clears NA With Key Tax Relief Changes
Pakistan’s National Assembly passed the Finance Bill 2026 in Islamabad on Tuesday after opposition members walked out of the lower house, clearing the central legislative step for the federal budget. The bill’s passage came with a set of revised tax, duty and exemption measures that will shape consumer prices, aviation costs, electric vehicle imports and business taxation in the coming fiscal cycle.
Finance Minister Muhammad Aurangzeb moved the bill after the house rejected seven amendments proposed by opposition lawmakers through a majority vote. The approved version included changes recommended by the National Assembly Standing Committee on Finance, showing that the final package was adjusted after parliamentary review rather than passed exactly as first tabled.
Among the most visible changes was the government’s decision to withdraw the proposed 20 percent federal excise duty on mineral water, aerated water and hydration or electrolyte drinks with low sugar content. The relief applies to beverages with sugar or artificial sweetener content below 5 grams per 100 millilitres, reversing an earlier proposal that had covered such products more broadly.
The revised bill also expanded tax facilitation for the aviation sector. Instead of limiting a sales tax exemption on aircraft imports or leases to Pakistan International Airlines, the final version extends the benefit to all airlines operating in the country from July 1, 2027, covering aircraft as well as related parts. The move could ease future fleet expansion or maintenance costs for local carriers.
On electric vehicles, the bill links federal excise duty on imported electric cars and SUVs to their assessed dollar value. Completely built-up electric cars and SUVs valued up to $75,000 will face no FED, while vehicles valued between $75,000 and $110,000 will be taxed at 30 percent. Vehicles exceeding $110,000 will attract a higher 40 percent duty, reflecting a policy tilt toward lower-priced electric imports while preserving heavier taxation on premium models.
The legislation also brings changes for mobile phone imports, traders and energy-linked taxation. DIRBS-related tax on imported phones may now be paid in instalments, although all payments must be completed within the same financial year. Traders with turnover up to Rs200 million may opt out of the fixed tax regime by filing a final certificate before submitting returns for tax year 2027, while coal imports directly supplied to independent power producers will face a minimum one percent value addition tax under specified conditions.
The bill adds incentives for investment funds as well. Income derived from private equity and venture capital funds registered under the Private Funds Regulations, 2015, may qualify for exemption if the fund distributes at least 90 percent of its adjusted accounting income to investors. However, this relief will not apply where a fund is created to acquire a publicly listed company without converting it into a private limited company after acquisition.
For the steel sector, the approved framework allows tax collection from steel melters, re-rollers and composite units on the basis of electricity consumed, including power generated through captive plants or alternative sources. The Federal Board of Revenue will determine the per-unit sales tax by using minimum notified prices and industrial electricity consumption benchmarks, while the collected amount will be adjustable in returns.
The Finance Bill’s approval is significant because it locks in the tax framework behind the government’s budget strategy at a time when households, businesses and investors are closely watching inflation, compliance costs and growth signals. The next immediate parliamentary step is the approval of supplementary grants for the outgoing fiscal year, while implementation details will depend on notifications, tax rules and FBR procedures in the weeks ahead.