Government Officially Notifies Finance Act 2026, New Budget Measures Effective From July 1
The federal government has officially issued the gazette notification for the Finance Act 2026, bringing the budget measures for the 2026-27 fiscal year into effect from July 1, 2026.
The new law introduces changes to taxation, customs duties, withholding taxes, and other fiscal measures announced in the federal budget.
Changes to Property Transaction Taxes
Under the Finance Act, revised advance tax rates will apply to property transactions from the beginning of the new fiscal year.
The updated rates include:
- Sellers: Advance tax of 2.75% of the gross sale amount.
- Buyers: Advance tax of 1.25% of the property’s fair market value.
Tax Measures for Businesses
The Finance Act also introduces new tax provisions for certain sectors.
According to the notification:
- Banking companies and fertilizer manufacturers will be subject to a 10% tax on income exceeding Rs. 150 million.
- Corporate entities with annual income above Rs. 500 million will be subject to an 8% tax, in accordance with the provisions of the Finance Act.
Withholding Tax on International Card Transactions
From July 1, a 0.5% withholding tax will apply to eligible international transactions made using credit and debit cards, as specified in the Finance Act.
Customs Duty Revisions
The government has also revised customs duties on a range of imported products.
According to the new policy:
- Customs duties on imported vehicles with engine capacities between 850cc and 1,800cc have been reduced.
- Customs duties on auto parts have been lowered by 10%.
- Duties on motorcycles have been reduced by 20%.
- Additional customs duties on selected items, including certain auto-sector products, vegetable oil, gold, silver, and mobile phones, have also been reduced.
Budget Measures Now in Effect
The government stated that the reductions in customs and regulatory duties are expected to lower overall revenue collections while supporting broader fiscal and trade policy objectives.
The Finance Act 2026 was approved by the National Assembly and subsequently received the President’s assent. With the publication of the official gazette notification, the law has formally come into force, and the budget measures for the 2026-27 fiscal year will be implemented from July 1, 2026.
