Updated 19 September 2026 Finance Act gazetted · 26 June Implementation checked through 19 Sep

Pakistan Federal Budget FY2026-27: The Business Brief.

This report translates the budget into plain English: where the money goes, who gets tax relief, who gets new tax pressure, sector-wise impact, and what is still unclear.

Main read: the 19 September review adds FBR explanatory circulars, refund validation changes, expanded steel lists, hybrid-vehicle relief, pension verification procedures and employee allowance guidance. August CPI is now 11.1% year-on-year. The Finance Act 2026 and headline budget targets remain the report baseline.

Finance Act & Implementation Update

The 1-19 September review adds tax guidance, operating-rule amendments and pension/payroll implementation. It also adds the previously omitted 31 August Economic Update. Earlier measures remain below for context; headline FY2026-27 allocations and targets are unchanged in this report.

Gazetted Act · 26 Jun

Tax guidance and refund processing

FBR published income-tax Circular 02 on 8 September and sales-tax/FED Circular 01 on 11 September. These explain the Finance Act 2026; they do not replace it. Income tax Sales tax / FED
SRO 1498 adds four weekly checks after the initial eight validation cycles under rules 29(2) and 39F. Only amounts still uncleared or unverified then move to STARR processing. This changes refund timing, not the tax rate. Refund rules
STGO 22 adds five manufacturers to the Rs 5-per-unit electricity list, taking it to 36, effective immediately from 5 September. Separately, STGO 23 adds four corporatization successors on 16 September, taking that table to 23. STGO 22 STGO 23

Pension verification and employee allowances

The 18 September SOP replaces the 7 September version for covered federal defined-benefit pensioners. Proof of life is required at least every six months through NADRA channels, including Pak-ID; fixed March/September verification dates are abolished. Manual fallback arrangements remain available. Pension SOP
Banks ordinarily disburse pensions and cannot impose dormancy solely for missing proof of life. CGA/MAG instead place the ledger in suspense after six months without a valid life signal, suspending payment; valid verification restores it and releases arrears. Suspense / restoration
HEC-recognized degrees equivalent to M.Phil qualify for the Rs 2,500 monthly allowance from 17 July, subject to an equivalence certificate and prescribed conditions. The 3 September GPF resolution confirms 12.05% for FY2025-26. M.Phil allowance GPF resolution
The 7 September appointment memorandum extends the special-pay policy to contractual positions for covered federal civil servants selected through open competition in government-owned entities, subject to the stated deputation conditions. Appointment policy

Vehicle relief and economic update

SRO 1525, dated 13 September, immediately excludes locally manufactured hybrid electric vehicles up to 2,000cc from Table II of SRO 297(I)/2023. Other applicable sales-tax provisions still require checking; this is not a blanket exemption. Hybrid notification
August national CPI is 11.1% year-on-year, up from 9.2% in July, and 1.2% month-on-month. Urban inflation is 10.4% and rural inflation 12.2% year-on-year. The FY27 target remains an 8.2% annual average, a different measure. PBS August
The August Economic Update, published 31 August and added in this review, records July FY27 FBR collection of Rs 820.9 billion, up 8.4%, and FY26 large-scale manufacturing growth of 4.98%. These are outturns, not revisions to FY27 targets. August outlook

What is now official

The Finance Act 2026 is Act No. XLIII of 2026, published in the Gazette of Pakistan, Extraordinary, Part I, on 26 June 2026. Gazette p.1
It received presidential assent on 26 June 2026 and generally comes into force on 1 July 2026 unless a provision says otherwise. Gazette p.2
The local Gazette copy remains the offline legal source; FBR's online Finance Act mirror links the same official text without storing a second 40MB copy. FBR PDF

Budget books and releases

Finance Division's budget books now support the headline spending, receipts and appropriation figures directly. Budget Brief p.8 ABS p.3 Demands p.3
The 1 July release strategies set quarterly release rules for development and recurrent budgets; they are operating controls, not tax-law changes. Dev release p.1 Recurrent release p.1
FBR's Tax Year 2027 withholding-tax rate card is now available for ATL/non-ATL rate checks. It is a reference aid, not a legal instrument; the amended Income Tax Ordinance prevails if they conflict. TY2027 rate card
The provisional FY2025-26 consolidated fiscal results show a 2.6%-of-GDP deficit and 2.9% primary surplus. Federal tax revenue was Rs 13.010413T, making the Rs 15.264T FY27 target about 17.3% higher. These are prior-year actuals, not revised FY27 targets. Fiscal results

New relief in the passed version

Imported-phone tax may be paid in instalments within the financial year. Committee p.5
Any Pakistan-registered airline can receive the aircraft/parts import or lease exemption from 1 July 2027. Committee p.5
Super tax does not apply where realized export proceeds exceed 80% of turnover. Committee p.12
Qualifying private-equity and venture-capital funds get an income exemption when at least 90% of adjusted accounting income is distributed. Committee p.11

Rates and operating rules changed

CBU EV FED tiers move to USD 75,000 and USD 110,000; imported 2,000cc-3,000cc and above-3,000cc vehicle FED becomes 86% and 92%. Committee p.14 p.15
Life-insurance and family-takaful payouts become exempt after four years; payouts after one year but before four years are listed at 10%. Committee p.10
Expense disallowance for failure to install required electronic resources is reduced from up to 5% to 3%. Committee p.6
Approved in-house use of white spirit and solvent oil can receive a conditional FED exemption. The 1% coal value-addition rate now has an operating order requiring registered importers, direct exclusive supply to a NEPRA-licensed coal IPP, supporting contracts, records and audit compliance. Gazette p.73 STGO 9/2026
STGO 17 amends the small-confectionery printing concession: where individual wrappers cannot practically carry the information, packages may contain up to 250 pieces, each priced at no more than Rs 10 and weighing no more than 10 grams. Permanent retail-price and sales-tax printing and the other STGO 8 requirements still apply. STGO 17
STGO 19 replaces STGO 11 Annexure-A from 1 July 2026. Local manufacturer supplies use value of supply; covered imports use 130% of the customs value inclusive of customs duties and FED. The retailer pays tax on retail value, and both supplier and retailer must meet the stated digital integration, POS and digital-invoice conditions. Revised matrix
STGO 10 provides the time-limited iron/steel NTN/STRN transition. STGO 12 lists the first eight successors and STGO 13 corrects one record; STGO 18 adds seven, STGO 21 adds four and STGO 23 adds four, bringing the successor list to 23. This is separate from the 36 taxpayers in the electricity-tax list after STGO 22. STGO 23 STGO 22 STGO 18 STGO 21
SRO 1245 implements electricity-based sales tax for steel units from 1 July: Rs 30 per unit for local-scrap users, Rs 5 for qualifying integrated users with more than 70% imported/EFS scrap, and Rs 35 for captive/self-generated power. STGO 16 supersedes STGO 14; STGO 22 adds five taxpayers to its initial 31, taking the list to 36 with immediate effect for the additions. STGO 22 SRO 1245/2026 STGO 16/2026
STGO 20 provides risk-based sales-tax registration: complete low-risk applications should be approved within three working days as far as practicable; deficiencies must be specified within seven days. Manufacturer association certification assists verification but does not replace legal checks or grant immunity. Registration rules
SRO 1166 already notifies a voluntary small-shopkeeper procedure for Tax Year 2026: eligible individuals with turnover up to Rs 200m pay 1% of gross turnover, with cash payment of at least Rs 25,000 after withholding adjustments. Multi-shop owners, Tier-1 retailers, jewellers and professionals are excluded. Shopkeeper rules
SRO 1413, dated 19 August, brings the Independent Case Scrutiny Committee (Customs) Rules into force immediately. Committees review proposed higher-court litigation and pending cases; this is a legal-process reform, not a change in tariff rates. Customs scrutiny rules

Pay, pensions and spending controls

BPS-2026 replaces BPS-2022 from 1 July. A separate taxable 7% Ad-hoc Relief Allowance applies to running BPS-2026 basic pay and is not pensionable. BPS p.1 Relief p.2
Federal conveyance allowance rises 50%, and existing disparity-allowance recipients receive 15% of 30 June 2022 basic pay. Conveyance DRA
Baseline pensions rise 7%, while FY2026-27 austerity controls continue across federal ministries, attached departments, SOEs, statutory bodies and regulators. Pension Austerity
Finance Division clarified that existing Ad-hoc Relief Allowance-2023 and 2024 amounts remain frozen, while new entrants receive notional rates based on minimum BPS-2022: 35%/30% for 2023 and 25%/20% for 2024 across BPS 1-16/BPS 17-22. BPS clarification
Sixteen pension fund managers were listed on 2 August. The 11 August implementation notice requires focal persons, verified employee records and AGPR updates within 15 days of receipt for covered regular appointees from 1 July 2024. This operationalizes the contributory scheme; it does not replace the 7% increase for existing pensioners. Pension implementation
FY2026-27 Diyat is set at Rs 19,352,390, the value of 30,630 grams of silver; this is a statutory compensation benchmark, not a new budget allocation. Diyat
The 21 August notification sets a Rs 40,700 minimum gross salary for covered federal civil employees from 1 July, with the shortfall paid as taxable, non-pensionable Special Allowance. It is not a nationwide private-sector minimum-wage order. Salary floor
Revised GPF monthly subscriptions range from Rs 722 (BS-1) to Rs 17,605 (BS-22), deducted from August salary payable on 1 September 2026. The existing 3%/5%/8% rates apply to the mean of the relevant BPS-2026 scale, not each employee's running basic pay. GPF schedule Effective date
GPF mark-up for the completed FY2025-26 is 12.05%, compared with 12.46% for FY2024-25. This does not set an FY2026-27 return. GPF mark-up

Review scope: official documents checked through 19 September 2026. The Finance Act remains the legal baseline; broad FBR explanatory circulars are now available. The STGO index was checked through order 23. This targeted review is not an exhaustive SRO inventory. August is the latest monthly CPI reviewed.

Important correction: the introduced bill put retail-packed pesticides/insecticides in the Sales Tax Third Schedule. The committee-reported bill removed that pesticide entry, and the gazetted Act confirms the final Third Schedule list without that pesticide entry; existing product tax, heading and valuation rules still need product-level checking. Introduced p.35 Committee p.4 Gazette p.61

Growth / inflation

4.0% / 8.2%

Official GDP growth and average inflation targets. Radio note

Defence

Rs 3.000T

About 16.0% of the total outlay. Budget Brief p.8

Federal PSDP

Rs 1.000T

The federal development budget, separate from provincial and SOE development. Budget Brief p.8

BISP

Rs 838B

Budget-book allocation is about Rs 838b; programme targets still come from speech coverage. Budget Brief p.29

Target vs Actual: Starting Position

These are the latest available baselines, not forecasts. They show how demanding the FY2026-27 plan is and what should be updated during the year.

Track monthly / quarterly

FBR revenue

Rs 13.010T → 15.264T

Official provisional FY26 federal tax revenue to FY27 target: about a 17.3% increase. FY26 fiscal result

Inflation

11.1% vs 8.2%

August 2026 year-on-year CPI versus the FY27 average target. CPI rose from 9.2% in July and increased 1.2% month-on-month; monthly year-on-year inflation and an annual-average target are different measures. PBS August

Tax expenditure

Rs 2.353T

Estimated revenue forgone through income-tax, sales-tax and customs concessions. Tax expenditure

Government guarantees

Rs 4.322T

Outstanding guarantees at end-March 2026 are a fiscal risk outside the headline budget. Guarantees

FY26 external close

-$0.14B / $4.6B

Current-account deficit / record IT exports; IT exports rose 20.6%. These are FY26 closing baselines, not FY27 target changes. July outlook

FY26 fiscal close

2.6% / 2.9%

Provisional consolidated deficit / primary surplus as shares of GDP. Compare separately with FY27 targets of 3.6% / 2.0%. Fiscal results

Where The Money Goes

Debt servicing dominates the plan. Development exists, but the federal budget is mostly current expenditure.

High confidence

Big spending blocks

Mark-up

42.9%

Defence

16.0%

Grants

14.3%

Pensions

6.2%

Subsidies

5.8%

Federal PSDP

5.3%

Plain-English diagnosis

Relief is targeted, not broad. Salary tax relief starts mainly from higher formal salaries, and business relief focuses on documented sectors.
Debt cost eats the room. Mark-up alone is nearly 43% of the total outlay.
IMF discipline still drives the frame. The budget keeps a 2% primary surplus target and 3.6% fiscal deficit target.
Execution matters more than speeches. FBR, provinces, customs, and PSDP release data will decide the real impact.

Sector-Wise Tabs

Each tab is written for quick office sharing. Tax items are grouped as reduced, removed, added, or still unclear.

Same-page tabs

Reduced

Salaried rates reduced for taxable income from Rs 2.2m to Rs 7.0m. Finance p.81
Super tax removed up to Rs 500m income and cut to 8% above Rs 500m, with sector exclusions. Salient p.7
Export proceeds tax collection reduced from 2% to 1.25%. Salient p.8
Foreign card advance tax reduced from 5% to 0.5%. Salient p.8
Super tax does not apply where realized export proceeds exceed 80% of total turnover. Committee p.12
Customs duties, ACD and RD are rationalized across many tariff lines; SRO 1063 and SRO 1064 provide the operative ACD/RD notifications, while the new First Schedule gives exact replacement CD rates for listed PCT codes. Salient p.1 SRO 1063 SRO 1064 First Sch p.1
Acetate tow FED is reduced from Rs 44,000/kg to Rs 10,000/kg. Salient p.13

Removed / exempted

The committee omitted the whole proposed Petroleum Levy/Climate Support Levy amendment clause; existing levy law remains. Committee p.2
Salaried surcharge provisions omitted. Notes p.8
Section 7E deemed income tax on immovable property omitted. Salient p.7
CVT on foreign movable/immovable assets proposed to be abolished. Salient p.7
Contraceptives and female sanitary pads/tampons added to exempt schedule. Finance p.39
Magazines, targeted shipping/refinery imports, and EV CKD extensions get relief. Salient p.4
Qualifying private-equity and venture-capital funds receive an income exemption when at least 90% of adjusted accounting income is distributed. Committee p.11

Added / higher

Social-media platform revenue: 5% withholding for ATL persons and 10% for non-ATL persons in the TY2027 rate card. Rate card p.9
FED Rs 80/litre remains on petroleum top naphtha, white spirit/MTT and solvent oil; the final Act includes a narrow in-house exemption for approved white spirit and solvent oil use. Gazette p.73 p.74
The retail-packed Third Schedule expansion remains, but pesticides/insecticides are removed from the proposal; plastic sheets/film/foil/tape remain, POS-integrated footwear gets a carve-out, and tableware is limited to retail sale. Committee p.4 Reported p.37
Committee vehicle FED: CBU EVs at 0%/30%/40% by USD 75,000 and USD 110,000 thresholds; imported 2,000cc-3,000cc and above-3,000cc vehicles at 86%/92%. Committee p.14 p.15
Life-insurance and family-takaful payouts after one year but before four years are listed at 10%; exemption begins after four years. Committee p.10
Minimum tax for distributors and wholesalers of specified sectors rises from 0.25% to 0.5%. Salient p.9
FBR digital integration, production monitoring, and penalty systems get tougher. Notes p.5

Tax area	Old / previous	FY2026-27 proposal	Business meaning
Salaried tax slab	23%, 30%, 35%, 35% across affected higher slabs	20%, 25%, 29%, 32%; 35% starts above Rs 7.0m	Relief for formal higher-income salaried workers, not a full lower-income overhaul.
Super tax	1%-7.5% up to Rs 500m; 10% above Rs 500m	0% up to Rs 500m; 8% above Rs 500m, except banks, E&P, fertilizer	Meaningful relief for many companies, but not for excluded sectors.
Property sale WHT 236C	4.5%-5.5%	2.75%	Lower cost for documented property sellers.
Property purchase WHT 236K	1.5%-2.5%	Gazetted Act says 1.25% of fair market value Gazette p.58	The rate conflict is resolved; still include provincial charges, registration costs and transaction-profile checks.
Foreign card payments	5%	0.5%	May reduce incentive to use informal channels for foreign payments.
Social media revenue	No specific platform WHT regime in these terms	5% ATL / 10% non-ATL WHT on platform revenue. Rate card p.9	Content creators and agencies should expect bank/platform-level tax documentation.

Legal status

The final law is the Finance Act, 2026, Act No. XLIII of 2026, published in the Gazette of Pakistan Extraordinary, Part I. Gazette p.1
The Act received presidential assent on 26 June 2026. Gazette p.1
It generally comes into force on 1 July 2026, unless a provision gives another start date. Gazette p.2
FBR's Finance Act page provides an online mirror of the same official text; the local Gazette remains the sole offline copy. FBR PDF

Checks now resolved

Property purchase advance tax under 236K is confirmed at 1.25% of fair market value. Gazette p.58
The final Third Schedule list does not carry the introduced pesticide/insecticide/fungicide/herbicide entry; it does list insect sprays among broader household goods. Gazette p.61
The white spirit and solvent oil in-house carve-out is in the gazetted Act, with Form-L, quota and digital-invoice conditions. Gazette p.73 p.74

Still practical, not theoretical

Use the Gazette as the legal baseline. FBR has since issued a coal value-addition order and final marine-bunkering rules; other circulars, certificates and sector notices still determine day-to-day application. STGO 9/2026 SRO 1082/2026
Vehicle, aviation, banking, property and customs decisions still need exact section, PCT code, certificate or transaction-profile matching.
For quick office sharing, the older Finance Bill and committee PDFs are now history/context; the Gazette PDF is the final law text.

Household and employee relief

The 7 September appointment memorandum extends the special-pay policy to contractual positions for covered federal civil servants selected through open competition in government-owned entities, subject to the stated deputation conditions. Appointment policy
HEC-recognized degrees equivalent to M.Phil qualify for the Rs 2,500 monthly allowance from 17 July, subject to an equivalence certificate and prescribed conditions. The 3 September GPF resolution confirms 12.05% for FY2025-26. M.Phil allowance GPF resolution
Banks ordinarily disburse pensions and cannot impose dormancy solely for missing proof of life. CGA/MAG instead place the ledger in suspense after six months without a valid life signal, suspending payment; valid verification restores it and releases arrears. Suspense / restoration
The 18 September SOP replaces the 7 September version for covered federal defined-benefit pensioners. Proof of life is required at least every six months through NADRA channels, including Pak-ID; fixed March/September verification dates are abolished. Manual fallback arrangements remain available. Pension SOP
BPS-2026 replaces BPS-2022 from 1 July after merging the 2022 and 2025 ad-hoc relief allowances. Existing employees have a 30-day option; no response defaults to BPS-2026. BPS p.1 p.3
A taxable 7% Ad-hoc Relief Allowance applies to running BPS-2026 basic pay; it is not included in pension/gratuity or house-rent recovery. Relief p.2
Conveyance allowance rises 50%, and existing disparity-allowance recipients receive 15% of basic pay as at 30 June 2022. Conveyance DRA
Baseline pensions rise 7% from 1 July for federal civil, defence-paid, armed-forces and civil-armed-forces pensioners, with specified orderly-related benefits excluded. Pension
The 21 August notification sets a Rs 40,700 minimum gross salary for covered federal civil employees from 1 July, with the shortfall paid as taxable, non-pensionable Special Allowance. It is not a nationwide private-sector minimum-wage order. Salary floor
Revised GPF monthly subscriptions range from Rs 722 (BS-1) to Rs 17,605 (BS-22), deducted from August salary payable on 1 September 2026. The existing 3%/5%/8% rates apply to the mean of the relevant BPS-2026 scale, not each employee's running basic pay. GPF schedule Effective date
The 11 August implementation notice requires focal persons, verified employee records and AGPR updates within 15 days of receipt for covered regular appointees from 1 July 2024. This operationalizes the contributory scheme; it does not replace the 7% increase for existing pensioners. Pension implementation
FY2025-26 GPF mark-up is 12.05%; this is the previous fiscal year's fund return. GPF mark-up
Female sanitary pads/tampons and contraceptives: added to sales-tax exemption schedule in the Finance Bill. Finance p.39
Salaried taxpayers in higher bands get reduced rates, but the lowest brackets are mostly unchanged. Finance p.81

Social protection

BISP allocation: Rs 838 billion. Radio note
Kafaalat target: 12 million families. Radio note
Taleemi Wazaif target: 9.2 million children. Radio note
Income-tax exemption is extended to specified welfare and charitable entities including Pakistan Red Crescent Society, Shaheen Foundation, Dawat-e-Hadiya, Bahria Foundation and SIUT. Finance p.87
AJK, GB and newly merged KP districts receive current-expenditure allocations of Rs 146b, Rs 88b and Rs 95b respectively. Radio note

Good for formal business

Super tax relief lowers the burden for many companies outside excluded sectors.
Customs tariff rationalization can reduce input costs for manufacturers, but only if their exact PCT codes are covered and the statutory First Schedule rate is checked against any Fifth Schedule concession. First Sch p.1 Fifth Sch p.3
Specialized construction vehicles get customs duty reduction from 20% to 10%. Salient p.1
Tax credit equal to 10% of investment in electronic resources for FBR integration supports digital compliance. Salient p.8
Export-oriented businesses above the 80%-of-turnover proceeds test avoid super tax, while qualifying private-equity and venture-capital funds get a conditional income exemption. Committee p.11 p.12
SRO 1498 adds four weekly checks after the initial eight validation cycles under rules 29(2) and 39F. Only amounts still uncleared or unverified then move to STARR processing. This changes refund timing, not the tax rate. Refund rules
Eligible iron and steel manufacturers use the STGO 10 transition to link old and new NTN/STRN records through 31 December 2026. The successor table now has 23 entities after STGO 23; the Rs 5-per-unit electricity list remains a different list. STGO 23 STGO 18 STGO 21

Compliance changes

Tier-1 retailer definition expands to retailers with turnover over Rs 200m. Finance p.15
Specified distributors, dealers, sub-dealers and wholesalers face minimum tax increase from 0.25% to 0.5%. Salient p.9
FBR can require electronic resources and real-time reporting, but the passed amendment reduces related expense disallowance from up to 5% to 3%. Committee p.6
The committee lets a person with turnover up to Rs 200m opt out of the fixed/final regime at return filing for Tax Year 2027 onward. Committee p.6
SRO 1166 already notifies a voluntary small-shopkeeper procedure for Tax Year 2026: eligible individuals with turnover up to Rs 200m pay 1% of gross turnover, with cash payment of at least Rs 25,000 after withholding adjustments. Multi-shop owners, Tier-1 retailers, jewellers and professionals are excluded. Shopkeeper rules
STGO 20 provides risk-based sales-tax registration: complete low-risk applications should be approved within three working days as far as practicable; deficiencies must be specified within seven days. Manufacturer association certification assists verification but does not replace legal checks or grant immunity. Registration rules
The proposal allowing FBR to share sectoral sales-tax return data among registered businesses is removed. Committee p.4

What may help chemicals

Customs duty is reduced on 92 industrial input tariff lines. The First Schedule gives exact replacement rates for selected chemical, paper, plastic, packaging, machinery and electrical PCT lines, so product mapping is essential. Salient p.1 BR note First Sch p.1 First Sch p.2
Additional Customs Duty is reduced from 6% to 4% on 449 tariff lines, from 4% to 2% on 2,107 lines, and eliminated on 569 lines. Salient p.1
Regulatory Duty above 20% is capped at 20% on 359 tariff lines, with further RD reductions across many other lines. Salient p.1
Fifth Schedule Part-II lists many APIs at 0% customs duty under DRAP-linked conditions; this helps pharma raw-material chains rather than every chemical importer. Fifth Sch p.55

Input relief possible PCT code required

What gets more expensive / tighter

Petroleum top naphtha, white spirit/MTT and solvent oil remain at FED of Rs 80 per litre. Approved in-house white spirit and solvent oil use can qualify for the gazetted conditional exemption; top naphtha cannot. Gazette p.73 p.74
Lubricating oil and base lubricating oils are listed at 5% FED ad valorem. Finance p.104
The exemption needs Form-L licences for importer and recipient, approved quota, in-house consumption, and the applicable sales-tax/digital-invoice conditions. Gazette p.73 p.74
E-liquid FED rises to Rs 16,500/kg, while the old 65% retail-price alternative is removed. Salient p.13
Fertilizer is excluded from super-tax relief; fertilizer distributors/wholesalers are also named in the minimum-tax increase to 0.5%. Finance p.89

Solvent cost risk Fertilizer excluded

Chemical-sector item	Budget change	Likely effect	What to verify
Industrial raw materials / inputs	First Schedule replacement CD rates plus ACD/RD rationalization across many tariff lines	Possible lower or clearer import cost for covered inputs	Exact PCT/HS code, statutory CD rate, Fifth Schedule concession and customs valuation
Pharma APIs for cancer/critical disease	Many APIs listed at 0%; pharma excipients/chemicals have item-specific concessionary rates	Targeted relief for local medicine production supply chains	Whether the exact API/excipient appears in the Fifth Schedule list and is DRAP-approved
Naphtha / white spirit / MTT / solvent oil	FED Rs 80 per litre; conditional in-house exemption for white spirit and solvent oil only	General cost pressure remains, but qualifying Form-L industrial users may receive relief	PCT code, Form-L licences, approved quota, in-house use, sales-tax status and digital invoicing
Lubricating/base oils	5% FED ad valorem listed for lubricating oil and base lubricating oils	Possible price pressure in lubricants and downstream products	Whether the item falls under the listed 2710 subheadings
Fertilizer	No super-tax relief for fertilizer sector; minimum tax for fertilizer distributors/wholesalers rises to 0.5%	Less relief than general businesses; distribution compliance cost may rise	Entity classification and documentation conditions
Retail-packed plastic/chemical goods	Expanded Third Schedule remains; plastic sheets/film/foil/tape stay, while the pesticide/insecticide entry is removed	Sales tax may be collected earlier/on consumer-price basis for covered goods	Whether the product is in the final Third Schedule list

Bottom line: chemical businesses should not trust a headline like "duties reduced" until they check product-level PCT/HS codes. Some inputs may get relief, while solvents, base oils and fertilizer-linked businesses face new or continuing pressure. The new schedule files make this more precise: compare the First Schedule statutory rate with any Fifth Schedule concession. The WhatsApp image in this folder was checked; it is the customs salient-features page and its highlighted ACD/RD points are included here.

What stayed friendly

SRO 1525, dated 13 September, immediately excludes locally manufactured hybrid electric vehicles up to 2,000cc from Table II of SRO 297(I)/2023. Other applicable sales-tax provisions still require checking; this is not a blanket exemption. Hybrid notification
EV CKD concession/exemption is extended to 30 June 2027 for local assembly support. Salient p.4
Fifth Schedule EV concessions continue through 30 June 2027: electric buses, electric trucks and electric prime movers are listed at 1% CD, and qualifying EV four-wheelers get concessional CD treatment. Fifth Sch p.98 Fifth Sch p.99
Specialized construction vehicles get customs duty reduction from 20% to 10%. Salient p.1
Auto Policy 2026-31 was still pending in public reporting, so the budget is not the full auto-sector roadmap. Dawn note

EV assembly support Policy still pending

What got hit

The committee substitutes CBU electric-car/SUV FED tiers: 0% up to USD 75,000 customs value, 30% above USD 75,000 to USD 110,000, and 40% above USD 110,000. Committee p.14
The First Schedule separately lists CBU electric trucks at 30% CD, while the Fifth Schedule can reduce qualifying electric trucks to 1%; eligibility and EDB certification decide the real rate. First Sch p.4 Fifth Sch p.99
The committee substitutes FED of 86% for covered imported vehicles from 2,000cc to 3,000cc and 92% above 3,000cc. Committee p.15
ICT token tax shifts for larger vehicles toward invoice-value basis: 0.25% for 1,001cc-2,000cc and 0.35% above 2,000cc. Finance p.105

Luxury imports Headline risk

Vehicle item	Budget change	Plain meaning	Missing / verify
EV CKD kits	EV-specific CKD components can qualify for concessional rates; EV plant and machinery and specified inputs are listed at 0%, with chargers imported with CKD kits at 1%	Good for local EV assemblers and vendor supply chains	Exact model/part eligibility, quota, EDB certification and localization rules
Imported personal-use EVs	0%, 30%, 40% FED at USD 75,000 and USD 110,000 customs-value thresholds	Lower-value CBU EVs spared; premium imports targeted	Customs value under section 25 and final enacted thresholds
Imported cars/SUVs from 2,000cc	86% for 2,000cc-3,000cc; 92% above 3,000cc	Committee proposal sharply increases the FED burden on large imported vehicles	Whether other duties and sales tax stack on top
ICT token tax	Larger vehicles move to invoice-value percentage	Higher-value cars pay more annually in Islamabad	Province-wise token tax is separate
Auto Policy 2026-31	Not fully released in the budget package	The sector still lacks the full roadmap	Cabinet-approved policy after budget

Ports and shipping

Sales-tax exemption is added for import of tankers, dredgers, drilling or production platforms, floating structures and goods-transport vessels, excluding cruise ships, excursion boats and ferry boats, subject to Ministry of Maritime Affairs approval. Finance p.40
Karachi Shipyard and Engineering Works gets a 0% customs-duty route for machinery, equipment, raw materials, components and other capital goods used in ship/boat/floating-structure work. Fifth Sch p.23 Finance p.43
Non-resident shipping compliance is tightened through the new authorised shipping agent framework and vessel/voyage return rules. Finance p.46 Finance p.60

Aviation and strategic imports

Aircraft, aircraft spare parts, maintenance kits, MRO/AMO machinery, new greenfield-airport equipment, aviation simulators and aircraft engines are listed at 0% CD for qualifying airline/aviation cases. Fifth Sch p.110 Fifth Sch p.111
The committee adds sales-tax exemption for import or lease of aircraft and parts by any Pakistan-registered airline, effective 1 July 2027. Committee p.5
Bullet-proof vehicles get targeted exemption for Federal Government SCO logistics and government counter-terrorism needs, subject to approvals. Finance p.40 Finance p.107
Club, business and first-class international air ticket FED is reduced into route-based rupee amounts from 1 July 2026. Finance p.106

Refineries and fuel trade

Existing refineries get sales-tax exemption on listed machinery and equipment for upgradation, expansion, balancing, modernization and rehabilitation, subject to direct import and ministry approval. Finance p.41 Finance p.43
Fifth Schedule also lists 0% CD for approved petroleum oil refining machinery and capital goods, subject to Petroleum Division and OGRA certification. Fifth Sch p.24
The committee removes the proposed petroleum-levy/climate-support-levy reporting, audit, recovery and penalty package. Existing levy law remains. Committee p.2
Terminal and port services are listed at 12% withholding on gross payment. Finance p.88 Finance p.89
Final marine-bunkering customs rules now cover operator registration, Pakistan Single Window declarations, port permissions, sampling, audit trails and penalties at Karachi, Port Qasim and Gwadar. SRO 1082/2026

Bottom line: ports, shipping, aviation and refinery operators have targeted import relief, while the final marine-bunkering rules add a concrete registration, declaration, sampling and audit workflow. Shipping-agent liability and terminal-service withholding remain, but the committee removed the proposed new petroleum-levy reporting package.

Electricity budget story

Power-sector federal development allocation is Rs 116.2 billion. Radio note
Total subsidies for electricity and other sectors are reported at Rs 1.091 trillion. Radio note
Business press reports power-sector subsidy cut to around Rs 830 billion for FY2026-27, with K-Electric allocation rising to Rs 163 billion. BR note
Rs 252 billion is reported for power circular-debt containment. BR note

What businesses should watch

Direct Subsidy Mechanism is expected from January 2027 after identifying and verifying subsidized consumers. Geo note
Government claims over Rs 143 billion savings versus allocated FY2025-26 power-consumer subsidy and net-zero circular-debt accumulation this year. Geo note
SRO 1245 now implements the steel electricity-tax regime: Rs 30 per unit for local-scrap users, Rs 5 for qualifying integrated units with more than 70% imported/EFS scrap, and Rs 35 for captive/self-generated power. STGO 16 originally lists 31 qualifying taxpayers from 1 July. STGO 22 adds five more with immediate effect from 5 September, covering all their electricity connections. STGO 22 SRO 1245 STGO 16
FBR's 7 July operating order applies the 1% minimum value-addition tax only to registered importers supplying imported coal directly and exclusively to a NEPRA-licensed coal IPP, backed by contracts, records and audit compliance. STGO 9/2026
Allocation does not equal lower bills; tariff notifications and subsidy eligibility will decide real impact.

Electricity item	Number / rule	Meaning	Missing / verify
Power development allocation	Rs 116.2b	Projects, grid and generation support	Quarterly PSDP release, not just budget allocation
Power subsidy	Reported around Rs 830b	Lower subsidy envelope can pressure tariffs if reform misses	Actual tariff notifications and subsidy circulars
Direct subsidy	Expected from January 2027	Subsidy may become consumer-targeted instead of broad	Eligibility, registration and bill treatment
Steel electricity basis	Rs 30/unit local scrap; Rs 5/unit qualifying integrated imported/EFS scrap; Rs 35/unit captive/self-generation	Electricity usage is an operative tax trigger; STGO 16 as amended by STGO 22 lists 36 taxpayers at the Rs 5 rate	Quarterly list changes, DISCO billing and continuing eligibility

Relief and support

First Schedule seed rates are now explicit for selected lines: soybean seed under 1201.1010/1020/1090 is 0% CD, low-uric rape/colza seed under 1205.1010/1020/1090 is 5%, and other listed rape/colza seed under 1205.9010/9020/9090 is 0%. First Sch p.1
Fifth Schedule Part-I gives exact agriculture machinery relief: tractor-mounted trenchers, laser land levelers, irrigation/drainage/agro-chemical application equipment, tube-well filters/strainers, spray pumps and mist blowers are listed at 0% CD. Fifth Sch p.4
Post-harvest stores, greenhouse/tunnel-farming equipment, fruit/vegetable/flower processing machinery, horticulture/floriculture tools, grain storage and cool-chain machinery also have schedule-specific concession routes. Fifth Sch p.5 Fifth Sch p.6 Fifth Sch p.8
Zarkhez programme targets 750,000 small farmers with Rs 300 billion in fully digital loans. APP note
Water projects receive Rs 103.1 billion, including major dam and Karachi K-4 allocations. Radio note

Pressure points

Fertilizer does not get the broader super-tax relief given to many businesses. Salient p.7
Fertilizer distributors and wholesalers are named in minimum-tax tightening to 0.5%. Finance p.89
Pesticide products and pesticide solvents need separate treatment from general agriculture relief; see the Pesticides tab. Finance p.35
Machinery relief is schedule-specific; every tractor, implement or spare part is not automatically exempt. The First and Fifth Schedule tractor entries need to be reconciled by exact PCT code before pricing. First Sch p.4 Fifth Sch p.109

Pesticide products

The introduced bill proposed adding retail-packed insecticides, fungicides, herbicides and related heading 38.08 products to the Sales Tax Third Schedule. Introduced p.35
The committee-reported bill removed that pesticide entry, and the gazetted Act keeps it out of the final Third Schedule list. Committee p.4 Gazette p.61
This removes a proposed Third Schedule valuation/pricing change; it is not a new sales-tax exemption for pesticides. Check the exact product heading, existing product rate and valuation rule before repricing.

Removed from proposal Gazette confirmed

Application equipment

Fifth Schedule covers agro-chemical application equipment at 0% CD, including submersible pumps, field drainage pumps, air release valves, pressure gauges, water meters, backflow preventers, controllers, tube-well filters and strainers. Fifth Sch p.4
Fertilizer and plant-protection equipment includes diaphragm spray pumps and mist blowers at 0% CD. This is equipment relief, not a pesticide product exemption. Fifth Sch p.4

Equipment relief Not product relief

Solvent inputs

Petroleum top naphtha, white spirit/MTT and solvent oil remain listed at FED of Rs 80 per litre. Gazette p.73
The same petroleum products are inserted into the Federal Excise Second Schedule; FBR describes this as VAT-mode treatment for the newly levied FED. Finance p.107 Salient p.13
Approved in-house use of white spirit and solvent oil may qualify for a conditional exemption. Both sides need Form-L licences, approved quota, and the applicable sales-tax/digital-invoice conditions; top naphtha is not included. Gazette p.73 p.74

Rs 80/litre FED VAT mode check

Pesticide-sector item	Verified budget treatment	Likely business effect	What to verify
Retail pesticide packs	Introduced Third Schedule addition removed from the gazetted Act	Proposed Third Schedule valuation change should not apply under the final Act	Existing product rate, exact heading and current valuation rules
White spirit / MTT	FED Rs 80/litre; conditional in-house exemption under the committee bill	Cost increase unless the approved industrial-use conditions are met	PCT 2710.1240, Form-L licences, quota, in-house use and digital invoices
Solvent oil	FED Rs 80/litre; conditional in-house exemption under the committee bill	Cost increase unless the approved industrial-use conditions are met	PCT 2710.1250, Form-L licences, quota, in-house use and digital invoices
Petroleum top naphtha	FED Rs 80/litre on PCT 2710.1942	Cost watch item for covered petroleum solvent inputs	Whether the input is the listed naphtha line, not a different petroleum product
Agricultural machinery	Customs-duty concession route for listed agriculture machinery/equipment	Relief for covered machinery, not pesticide chemicals or solvents	Whether the machine is listed, exact PCT code, and any certification condition
Spray pumps / mist blowers / application equipment	0% CD under Fifth Schedule Part-I for listed plant-protection and agro-chemical application equipment	Possible landed-cost relief for qualifying application equipment	Exact PCT code, ministry certification where required, and whether the item is equipment rather than pesticide product

Bottom line: retail pesticides were removed from the proposed Third Schedule expansion, but this is not a blanket tax exemption. Solvent inputs, active ingredients, application equipment and agricultural machinery still need separate HS/PCT and sales-tax/FED/customs checks.

Health and pharma relief

Health projects receive Rs 25.1 billion for tertiary care, emergency/critical care, cancer treatment, disease surveillance, diagnostics and regulatory modernization. Geo note
Fifth Schedule Part-II lists many APIs at 0% customs duty under DRAP-linked conditions; FBR's summary separately highlights critical cancer-related APIs. Fifth Sch p.55 Salient p.1
Contraceptives and female sanitary pads/tampons are added to the exempt schedule in the Finance Bill. Finance p.39

What is still unclear

The budget does not give a full medicine-pricing or hospital-cost roadmap.
API and excipient relief is targeted; pharma importers must check the exact Fifth Schedule API/excipient lists, PCT codes and DRAP approval route. Fifth Sch p.70 Fifth Sch p.71
Sanitary products and contraceptives should be checked against final sales-tax schedules and SRO treatment.

Small and medium retailers

SRO 1166 already notifies a voluntary small-shopkeeper procedure for Tax Year 2026: eligible individuals with turnover up to Rs 200m pay 1% of gross turnover, with cash payment of at least Rs 25,000 after withholding adjustments. Multi-shop owners, Tier-1 retailers, jewellers and professionals are excluded. Shopkeeper rules
The notified procedure applies to Tax Year 2026; do not silently extend it to TY2027. Existing TY2025 filers must meet the prior-year tax floor and anti-splitting conditions. The Act's TY2027 onward election is a separate provision. Applicability and conditions
Eligible participants receive the specified Section 153 withholding and POS/digital-invoicing exemptions, simplified returns and conditional audit protection. Withholding may be credited but excess is not refundable, and the minimum Rs 25,000 cash payment still applies. Procedure
The turnover threshold for withholding exemption of small traders is increased from Rs 100m to Rs 200m. Salient p.9
Tier-1 retailer definition expands to include retailers with Rs 200m or more annual turnover. Salient p.5
STGO 17 amends the small-confectionery printing concession: where individual wrappers cannot practically carry the information, packages may contain up to 250 pieces, each priced at no more than Rs 10 and weighing no more than 10 grams. Permanent retail-price and sales-tax printing and the other STGO 8 requirements still apply. STGO 17

E-commerce and documented sales

E-commerce tax is adjustable for sellers with turnover exceeding Rs 200m. Salient p.8
Sales-tax withholding and Third Schedule expansion increase pressure on unregistered buyers and retail-packed goods. Salient p.5
The 0.5% minimum-tax list is expanded to pharmaceuticals, fertilizer, cigarettes, sugar, locally made mobile phones, packaged food, electronics, beverages/dairy, cosmetics/personal care, cleaning products, tissues, foil, air fresheners and insect sprays, subject to ATL conditions. Committee p.12
STGO 20 provides risk-based sales-tax registration: complete low-risk applications should be approved within three working days as far as practicable; deficiencies must be specified within seven days. Manufacturer association certification assists verification but does not replace legal checks or grant immunity. Registration rules
STGO 19 replaces STGO 11 Annexure-A from 1 July 2026. Local manufacturer supplies use value of supply; covered imports use 130% of the customs value inclusive of customs duties and FED. The retailer pays tax on retail value, and both supplier and retailer must meet the stated digital integration, POS and digital-invoice conditions. Revised matrix

Retail-packed goods

The Third Schedule expansion remains broad, but the committee removes the pesticide/insecticide entry, keeps plastic sheets/film/foil/tape, carves out footwear sold through qualifying digitally integrated/POS-compliant channels, and limits tableware to goods put up for retail sale. The current transaction matrix is STGO 19 Annexure-A, replacing the original STGO 11 matrix. Committee p.4 STGO 19 matrix
STGO 17 amends the small-confectionery printing concession: where individual wrappers cannot practically carry the information, packages may contain up to 250 pieces, each priced at no more than Rs 10 and weighing no more than 10 grams. Permanent retail-price and sales-tax printing and the other STGO 8 requirements still apply. STGO 17
The new First Schedule also gives replacement CD rates for many plastics and packaging inputs, including plastic waste, sheets/films, bottles, caps, closures and other plastic articles. First Sch p.2
If a higher than 18% sales-tax rate is already notified for a listed product, that higher rate continues after Third Schedule inclusion. Finance p.38
Registered toll manufacturers must withhold from unregistered buyers at four times the tax charged on conversion charges. Finance p.45

Excise watch

WHO-standard sports or electrolyte beverages are carved out if formulated for hydration/electrolyte replenishment and do not contain sugar above 5g/100ml or artificial sweetener. Finance p.103
Acetate tow FED is reduced to Rs 10,000/kg from Rs 44,000/kg, while e-liquid FED rises to Rs 16,500/kg. Salient p.13
Cigarette brand variants cannot be introduced or sold below the lowest actual price of the existing brand on budget day, and counterfeit cigarettes/beverages face stronger monitoring, seizure and destruction rules. Finance p.104 Finance p.95

Consumer-sector item	Budget treatment	Business meaning	What to verify
Retail-packed FMCG	Expanded Third Schedule	Sales tax shifts closer to manufacturer/importer and consumer-price basis	Exact product category, packing, rate and valuation
Same-state imported goods	3% value addition tax if goods are sold as imported instead of used in-house	Manufacturers using import routes still face the 3% charge, but the introduced threshold-linked prosecution provision is removed	Import purpose, in-house consumption records and same-state sales ratio
Tobacco inputs / e-liquid	Acetate tow relief; e-liquid FED increase	Tobacco input cost may ease, vaping/e-liquid burden rises	Exact product line and FED table entry
Hydration beverages	Conditional carve-out from mineral/aerated beverage wording	Sports drink treatment depends on formula and sugar/sweetener content	Product formulation, nutrition label and final FBR guidance

Banking and finance rules

Banking companies remain excluded from super-tax relief; income above Rs 150m stays at 10% super tax. Salient p.7
Banks and electronic money institutions must provide high-value deposit and withdrawal data for algorithmic comparison through a Central Data Hub. Salient p.10
The committee also authorizes the State Bank to establish a secure centralized virtual repository of prescribed banking records and transactions. Committee p.8
Special Purpose Vehicles under asset-backed securitization are proposed for income-tax exemption. Salient p.8
Life-insurance and family-takaful payouts are exempt after four years; the amended rate table lists 15% within one year and 10% after one year but before four years. Committee p.10

Business meaning

Bank account flows, tax returns and declared sales need to match better than before.
Foreign card advance tax reduction from 5% to 0.5% may help formal foreign payments. Salient p.8
The missing piece is operational detail: data fields, thresholds, notices, correction process and certificates.

Bank savings / deposits

No clean headline relief was found for ordinary savings-account profit in the reviewed budget files.
The clear new bank-account rule is reporting of deposits or withdrawals above Rs 100m in a six-month reporting period for algorithmic tax matching. Finance p.65
The account definition includes current, call, saving, fixed, term and similar deposits, with peak credits and total credits included. Finance p.66

High-value accounts Certificate needed

Stocks, mutual funds, ETFs

NCCPL's role in computing and determining listed-securities capital gains is expanded and clarified. Salient p.11 Finance p.53
The protection from enhanced tax rates for non-ATL persons on capital gains from listed securities is withdrawn. Salient p.10
ETFs are not separately explained in the headline files; treat them by their legal product category, usually listed security or fund unit, until broker/fund guidance confirms it.

ATL matters more ETF category check

Capital market support

Qualifying Special Purpose Vehicles for asset-backed securitization get proposed income-tax exemption to support capital market development. Salient p.8
Qualifying private-equity and venture-capital funds get an income exemption when at least 90% of adjusted accounting income is distributed, subject to the listed-company acquisition restriction. Committee p.11
Special account holders using FCVA, FCBVA, NRVA or NRBVA accounts have listed categories for profit on debt, GOP securities, PSX securities, mutual funds and dividends. Finance p.90 Finance p.91
Broker, bank, CDC, NCCPL and fund-manager certificates still decide the practical tax record investors can actually use.

Structured finance relief Investor paperwork

Investor item	Budget change / signal	Plain meaning	What to verify before acting
Savings accounts / bank deposits	High-value deposits and withdrawals above Rs 100m are reportable for algorithmic matching.	Ordinary small savers are not the obvious target; large bank flows need clean declared-source records.	Bank tax certificate, withholding certificate, and whether flows cross the reporting threshold.
Profit on debt / government securities	Special-account language covers profit on debt and GOP securities through FCVA, FCBVA, NRVA and NRBVA routes.	Overseas/special-account investors should not generalize this to every local deposit account.	Account type, source of investment funds, withholding rate, and gazetted Finance Act wording.
Listed shares / stocks	NCCPL capital-gain computation role is clarified; non-ATL capital-gain protection is withdrawn.	Being on ATL and keeping broker/NCCPL records becomes more important for investors.	ATL status on transaction date, broker statement, CDC/NCCPL tax certificate, and final circular.
Mutual funds / ETFs	Mutual-fund units are named in the special-account language; ETFs are not separately explained in the headline files.	Do not assume a separate ETF rule; classification matters.	Fund category, whether the ETF is treated as a listed security or fund unit, and fund-manager tax note.
Dividends	Dividend income from PSX securities and mutual funds is included in the special-account wording.	Dividend paperwork should be kept separate from capital-gain paperwork.	Company/fund dividend voucher, withholding certificate, and investor tax profile.
Asset-backed securitization / SPVs	Qualifying SPV income is exempted.	This helps structured finance and capital-market product development, not every retail investor directly.	Whether the vehicle qualifies as an SPV under the final law and SECP/tax structure.

Plain warning: this tab is not investment advice. The budget does not say "stocks are good" or "savings accounts are bad"; it mostly changes compliance, reporting and product-specific tax treatment. Use the gazetted Finance Act plus bank, broker, CDC, NCCPL and fund-manager certificates before making a tax or investment decision.

What got easier

Advance tax on property sale under 236C is reduced to 2.75% of gross consideration. Gazette p.58
Section 7E deemed income on immovable property is omitted. Salient p.7
The government presents the change as construction-sector support. Radio note

What is now confirmed

236K purchase advance tax is confirmed at 1.25% of fair market value in the gazetted Act. Gazette p.58
Provincial taxes and registration costs are separate from federal advance tax.
Actual transaction cost still depends on the property, buyer/seller profile, withholding certificates and implementation guidance.

Gazette confirmed Check transaction profile

Exporters

Tax collection on export proceeds reduced from 2% to 1.25%. Salient p.8
The committee excludes a person from super tax when realized export proceeds exceed 80% of total turnover for the tax year. Committee p.12
Export Refinance Scheme allocation reported at Rs 88 billion. Radio note
Customs rationalization may help exporters if input goods fall under reduced tariff lines.

IT and freelancers

0.25% concessional tax rate for IT and IT-enabled services exports extended to Tax Year 2029. Salient p.7
FY26 IT exports closed at a record US$4.6 billion, up 20.6%, according to the July Economic Update. July outlook
Social-media revenue has 5% ATL / 10% non-ATL withholding rates in FBR's TY2027 reference card; track creator income and filing status separately. Rate card p.9

Publishing

Newsprint, books and magazines are in the exempt schedule, but brochures, leaflets and directories are excluded. Finance p.38
This is sales-tax relief for qualifying publishing products, not a blanket exemption for every printed marketing item.
Publishers should separate books/magazines from brochures, catalogues, leaflets and directories in invoices.

TV and advertising

Advance tax on foreign television plays and advertisements is withdrawn. Salient p.8
The practical effect depends on contract type, payment route, withholding certificate and final circulars.
Media buyers should still check whether other withholding, sales-tax or provincial service-tax rules apply.

Creators

Circular 02 confirms that section 154B deductions on social-media platform receipts are minimum tax for residents and final tax for non-residents without a Pakistan permanent establishment. Banking and non-banking financial institutions deduct at credit or receipt. Circular 02 p.3
FBR's TY2027 card lists 5% withholding for ATL persons and 10% for non-ATL persons on social-media platform revenue. The card is a reference aid; the amended law prevails. Rate card p.9
The Finance Bill names digital content creators and social media influencers earning from platforms such as YouTube, Facebook, Instagram and TikTok. Finance p.63
Creators should preserve platform statements, bank credit records, withholding certificates and expense records separately.

Bottom line: media is mixed. Books/magazines and foreign TV/ad advance tax get relief, while creator platform receipts become more directly reportable through financial institutions.

Transport

Transport infrastructure: Rs 365 billion.
N-25 Karachi-Chaman upgrade: Rs 100 billion.
M-6 Sukkur-Hyderabad: Rs 30 billion.
Karachi-Rohri ADB-financed work: Rs 25 billion.

Energy and water

Power sector federal development allocation: Rs 116.2 billion.
Water projects: Rs 103.1 billion.
Diamer-Bhasha Rs 14b, Mohmand Rs 22b, Dasu Rs 15b, K-4 Karachi Rs 10b.

Social and urban

Sustainable urban development and housing: Rs 54.6 billion.
Health projects: Rs 25.1 billion.
Higher education: Rs 46 billion.
School and college education: Rs 26.3 billion; youth skills Rs 7.9 billion.

All figures in this tab are from Radio Pakistan's detailed budget story, which reports the Finance Minister's sector allocation speech. Radio note

FBR is becoming more data-driven

FBR published income-tax Circular 02 on 8 September and sales-tax/FED Circular 01 on 11 September. These explain the Finance Act 2026; they do not replace it. Income tax Sales tax / FED
National Faceless Centre for audits, assessments and appeals. Salient p.10
Algorithmic settlement mechanism for discrepancy resolution. Notes p.10
Financial-data matching for high-value deposits and withdrawals. Salient p.10
Electronic invoicing and production monitoring expansion. Finance p.14
Current operating evidence includes STGO 17 confectionery limits, STGO 19 footwear valuation, STGO 20 risk-based registration and SRO 1413 customs case scrutiny. STGO 17 STGO 19 STGO 20 SRO 1413
Failure to install required electronic resources can disallow 3% of expenditure, reduced from the introduced “up to 5%” wording. Committee p.6
The proposal to share sectoral sales-tax return data among registered businesses is removed. Committee p.4

Business action list

Keep bank flows, sales invoices, inventory and tax returns consistent.
Map imports by exact HS/PCT code before assuming tariff relief.
Prepare for more system integration if turnover or sector triggers apply.
Review packaging against STGO 8 as amended by STGO 17, map footwear routes against the replacement STGO 19 annexure, and use the TY2027 withholding card alongside the law.
Check small-shopkeeper eligibility, tax year, minimum cash tax and anti-abuse conditions before claiming SRO 1166 exemptions. Shopkeeper rules
A taxpayer may object within 15 days to FBR's first external-auditor nominee; scrutiny committees may co-opt a chartered accountant as a non-voting member. Committee p.8
The proposed customs penalty increase is moderated to Rs 5m rather than Rs 10m. Committee p.2
SRO 1413, dated 19 August, brings the Independent Case Scrutiny Committee (Customs) Rules into force immediately. Committees review proposed higher-court litigation and pending cases; this is a legal-process reform, not a change in tariff rates. Customs scrutiny rules

1. Broad explanatory circulars are now available

The Gazette remains the legal baseline. FBR published income-tax Circular 02 on 8 September and sales-tax/FED Circular 01 on 11 September. Use these alongside applicable SROs and STGOs; this review does not claim exhaustive coverage. Income tax Sales tax / FED Rate card Registration

2. Property purchase rate conflict is resolved

The gazetted Act confirms 236K purchase advance tax at 1.25% of fair market value. Still check provincial costs, transaction profile and certificates before closing a deal. Gazette p.58

3. Customs relief is code-specific

"Tariff rationalization" does not mean every importer gets cheaper imports. It depends on exact PCT/HS lines, product classification, the First Schedule statutory rate and any Fifth Schedule concession conditions.

4. Vehicle tax headlines are messy

The committee changed key FED figures to USD-based EV thresholds and 86%/92% large-vehicle rates. Customs, sales tax and other charges can still stack, so do not price from the introduced bill or headlines.

5. Auto policy is still missing

The budget gives tax pieces, but the Auto Policy 2026-31 is still needed for localization, long-term tariff roadmap, incentives and model planning.

6. Electricity subsidy rules are not enough yet

Direct subsidy is expected from January 2027, but businesses and households need the actual eligibility, registration, verification and bill-treatment rules.

7. Banking data matching needs process clarity

Banks and EMIs may feed high-value transaction data into a Central Data Hub, but thresholds, notices, correction process and certificates still matter.

8. Social media tax treatment clarified

Circular 02 confirms that section 154B deductions on social-media platform receipts are minimum tax for residents and final tax for non-residents without a Pakistan permanent establishment. Banking and non-banking financial institutions deduct at credit or receipt. Circular 02 p.3 Check residence, permanent-establishment status and certificates before applying the treatment.

9. PSDP is allocation, not guaranteed release

Development budgets can be delayed or cut during the year. Track quarterly PSDP releases before treating projects as certain.

10. Provincial surplus is a big assumption

The 3.6% fiscal deficit target depends on provinces generating a Rs 1.794 trillion surplus. If this misses, pressure returns.

11. Retailer rules exist; verify eligibility and tax year

SRO 1166 is final for Tax Year 2026, with a voluntary 1% turnover route, minimum Rs 25,000 cash payment, exclusions and conditional compliance relief. The TY2027 onward election must be read separately; do not describe the whole scheme as awaiting rules. Final procedure

12. Pesticides left the proposed Third Schedule, not the tax system

The introduced bill's retail-pesticide entry is absent from the gazetted Third Schedule list. That avoids the proposed Third Schedule treatment, but it is not a blanket exemption; existing product tax, solvent FED and customs rules still apply. Gazette p.61

13. Third Schedule expansion is broad and packaging rules are now operational

STGO 8 price-display obligations remain, with the revised STGO 17 limits of 250 confectionery pieces, Rs 10 and 10 grams per piece. Footwear businesses must use the replacement STGO 19 annexure and its retailer/digital-invoice conditions. Printing amendment Footwear matrix

14. Logistics has both relief and a new operating workflow

Ports, shipping, aviation and refineries get targeted relief, while marine-bunkering operators now face registration, PSW, sampling and audit requirements. Shipping-agent liability and port-service withholding remain; the proposed new petroleum-levy reporting package was removed. SRO 1082/2026

15. WhatsApp image was only one customs page

The folder image confirms the highlighted ACD/RD customs points, but it does not replace the full FBR Salient Features PDF.

What Changed Timeline

A quick sequence for sharing context without forcing people to read legal PDFs.

12 Jun

Budget presented. Federal outlay Rs 18.771T, FBR target Rs 15.264T, 4% growth and 8.2% inflation targets announced.

12 Jun

FBR proposals released. Finance Bill, Notes on Clauses and Salient Features show legal details behind tax announcements.

22 Jun

Standing Committee reports an amended bill. Petroleum-levy law amendments are omitted and major vehicle, solvent, aviation, retail and compliance provisions are revised. Official report

23 Jun

National Assembly passes the Finance Bill. Government-backed and Standing Committee amendments are adopted after opposition amendments are rejected and the opposition walks out. Dawn scrape

26 Jun

Finance Act gazetted. Act No. XLIII of 2026 receives presidential assent and is published in the Gazette of Pakistan, Extraordinary, Part I. Gazette p.1

1 Jul

General commencement date. The Finance Act 2026 generally comes into force on 1 July 2026, unless a provision says otherwise. Gazette p.2

1 Jul

Release strategies issued. Finance Division's development and recurrent budget release strategies apply immediately and set quarterly fund-release controls for FY2026-27. Dev release p.1 Recurrent release p.1

2 Jul

Third Schedule label rules issued. STGO 8 requires prominent, permanent display of retail price, sales tax and final price on covered packs. It was added to this report in the 1 August review. Printing rules

7 Jul

Two operating rules issued. FBR set the documentary conditions for the 1% coal value-addition rule and finalized customs procedures for marine bunkering at Karachi, Port Qasim and Gwadar. Coal order Bunkering rules

13 Jul

Execution baseline expanded. Economic Survey, tax-expenditure, contingent-liability, performance-budget and June inflation documents were added for target-versus-actual tracking. Survey PBS inflation

14-17 Jul

FBR adds steel and footwear implementation. STGO 10 creates the voluntary-corporatization transition for eligible iron/steel manufacturers; STGO 11 clarifies the footwear/POS carve-out from the retail-price regime. Steel Footwear

21 Jul

Federal pay and austerity package notified. BPS-2026, the taxable 7% relief allowance, 50% higher conveyance allowance, disparity allowance and FY2026-27 austerity controls become operational from 1 July. BPS Conveyance Austerity

27 Jul

Diyat amount notified. Finance Division set the FY2026-27 statutory Diyat value at Rs 19,352,390, based on 30,630 grams of silver. Diyat

29-30 Jul

Pension and economic close-out published. Baseline federal pensions rise 7%; the July outlook reports FY26's US$0.14b current-account deficit and record US$4.6b IT exports. Pension Outlook

31 Jul

Steel rules become operational. SRO 1245 sets Rs 30, Rs 5 and Rs 35 per-unit electricity-tax categories; STGO 12 lists eight newly incorporated successor entities. SRO 1245 STGO 12

2 Aug

Contributory pension scheme moves forward. Finance Division lists 16 eligible pension fund managers that executed agreements for the Defined Contribution Pension Fund Scheme-2024. Managers

3 Aug

First FY27 inflation check and steel correction. July CPI is 9.2% year-on-year and 1.2% month-on-month; STGO 13 corrects one steel successor record. PBS July STGO 13

4 Aug

BPS-2026 allowance treatment clarified. Existing 2023/2024 ad-hoc allowances remain frozen, while new entrants receive the stated notional rates based on minimum BPS-2022. Clarification

5-6 Aug

FBR expands sector execution. STGO 15 adds the small-confectionery printing exception, and STGO 16 lists 31 steel taxpayers at Rs 5 per electricity unit. STGO 15 STGO 16

11 Aug

Contributory pension implementation. The 11 August implementation notice requires focal persons, verified employee records and AGPR updates within 15 days of receipt for covered regular appointees from 1 July 2024. This operationalizes the contributory scheme; it does not replace the 7% increase for existing pensioners. Pension implementation

12 Aug

Confectionery limits and steel list expand. STGO 17 raises the concession to 250 pieces/Rs 10/10 grams; STGO 18 adds seven steel successors. STGO 17 STGO 18

12-13 Aug

GPF and fiscal results published. FY26 GPF return is 12.05%; new GPF deductions apply to August pay. FY26 provisional deficit/primary surplus are 2.6%/2.9% of GDP. GPF return Deductions Fiscal results

19-20 Aug

Customs scrutiny and footwear rules. Customs case-scrutiny rules become final; STGO 19 replaces the footwear annexure from 1 July. SRO 1413 STGO 19

21 Aug

Federal gross salary floor notified. Covered employees receive a taxable top-up to Rs 40,700 from 1 July. Special allowance

24-27 Aug

Registration process and steel coverage expand. STGO 20 sets risk-based registration timelines; STGO 21 brings the steel successor table to nineteen. STGO 20 STGO 21

31 Aug

Report refreshed; earlier omission corrected. Added the TY2027 withholding card and the final 27 July small-shopkeeper procedure for TY2026. Their addition to this report is not their enactment date. Rate card SRO 1166

4-11 Sep

FBR published income-tax Circular 02 on 8 September and sales-tax/FED Circular 01 on 11 September. These explain the Finance Act 2026; they do not replace it. Income tax Sales tax / FED SRO 1498 adds four weekly checks after the initial eight validation cycles under rules 29(2) and 39F. Only amounts still uncleared or unverified then move to STARR processing. This changes refund timing, not the tax rate. Refund rules

5 / 16 Sep

STGO 22 adds five manufacturers to the Rs 5-per-unit electricity list, taking it to 36, effective immediately from 5 September. Separately, STGO 23 adds four corporatization successors on 16 September, taking that table to 23. STGO 22 STGO 23

13-14 Sep

SRO 1525, dated 13 September, immediately excludes locally manufactured hybrid electric vehicles up to 2,000cc from Table II of SRO 297(I)/2023. Other applicable sales-tax provisions still require checking; this is not a blanket exemption. Hybrid notification HEC-recognized degrees equivalent to M.Phil qualify for the Rs 2,500 monthly allowance from 17 July, subject to an equivalence certificate and prescribed conditions. The 3 September GPF resolution confirms 12.05% for FY2025-26. M.Phil allowance GPF resolution

18 Sep

The 18 September SOP replaces the 7 September version for covered federal defined-benefit pensioners. Proof of life is required at least every six months through NADRA channels, including Pak-ID; fixed March/September verification dates are abolished. Manual fallback arrangements remain available. Pension SOP

19 Sep review

August national CPI is 11.1% year-on-year, up from 9.2% in July, and 1.2% month-on-month. Urban inflation is 10.4% and rural inflation 12.2% year-on-year. The FY27 target remains an 8.2% annual average, a different measure. PBS August

Watch remaining implementation gaps. Check later notifications, creator and investor certificates, tax-year-specific retailer elections, and new CPI/PSDP releases. The withholding card is available, but it does not replace the law.

Sources & References

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