The federal government has officially enforced the Finance Act 2026 after issuing its gazette notification. The new law will come into effect from July 1 and introduces several changes to taxes, customs duties, and fiscal policies. Although the legislation applies across Pakistan, taxpayers in Punjab and other provinces will now have to follow the updated rules.
The Finance Act 2026 revises advance tax rates on property transactions. Under the new policy, property sellers will pay an advance tax of 2.75 percent of the gross sale amount. Property buyers will pay an advance tax of 1.25 percent based on the fair market value of the property.
These revised tax rates will apply from the beginning of the new fiscal year. Individuals and businesses in Punjab involved in property transactions will also be subject to the updated tax structure.
The government has also introduced new taxes for selected sectors. Banking companies and fertilizer manufacturers will pay a 10 percent tax on income exceeding Rs. 150 million. Corporate entities with annual income above Rs. 500 million will also face an 8 percent tax under the revised budget measures.
Another important change affects international card payments. Starting July 1, a 0.5 percent withholding tax will apply to international transactions made through credit and debit cards. The measure is intended to strengthen revenue collection under the new fiscal framework.
The Finance Act 2026 also includes several customs duty reductions. Duties on imported vehicles with engine capacities between 850cc and 1,800cc have been reduced by 35 percent to 50 percent. The government hopes these changes will support the automobile market and reduce import costs.
Customs duties on auto parts have also been reduced by 10 percent. In addition, duties on motorcycles have been cut by 20 percent under the revised auto policy.
The government has further reduced additional customs duties by 2 percent on the auto sector, vegetable oil, gold, silver, and mobile phones. These changes are expected to provide some relief to importers and consumers.
According to official estimates, reducing and eliminating additional customs duties will lower government revenue by Rs. 47.06 billion. 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 publication of the gazette notification, the law has officially come into force.
In other related news also read Senate Approves Tax Relief on Foreign Assets
From July 1, all budget measures for the 2026-27 fiscal year will be implemented nationwide. Businesses, investors, and taxpayers in Punjab and the rest of the country will now operate under the revised taxation and customs policies introduced through the Finance Act 2026.
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