President Zardari Approves Finance Bill 2026, Setting FY2026‑27 Budget at Rs18.8 Trillion

President Asif Ali Zardari formally approved the Finance Bill 2026 on Friday, authorizing a federal budget of Rs18.8 trillion for FY2026‑27.

The Presidency’s X account announced, “President Asif Ali Zardari has granted assent to the Finance Bill 2026 for the federal budget FY2026‑27.”

Finance Minister Muhammad Aurangzeb presented the FY2026‑27 budget in the National Assembly on June 12, proposing relief for higher‑income salaried workers and businesses through rationalised income, sales and customs taxes while encouraging documentation, digital compliance and investment.

The National Assembly passed the budget on Tuesday after the opposition walked out. All seven opposition amendments were rejected by a majority vote, yet the finance bill incorporated recommendations from the National Assembly Standing Committee on Finance.

Key revisions introduced since the bill’s tabling include the removal of duties on mineral water and hydration drinks, a sales‑tax exemption for domestic airlines importing or leasing aircraft, and adjustments to duties on imported electric cars and SUVs.

The proposed 20 percent Federal Excise Duty on mineral waters, aerated waters, hydration drinks and electrolyte beverages containing less than 5 g/100 ml of sugar or artificial sweetener has been withdrawn.

Previously, all such beverages attracted a flat 20 percent FED regardless of sweetener or sugar content.

The draft also extends a sales‑tax exemption on aircraft imports and leases to all airlines operating in Pakistan from July 1, 2027—a privilege previously limited to Pakistan International Airlines.

Excise duty on imported electric vehicles will now be assessed according to their value expressed in US dollars.

No FED will apply to electric cars and SUVs imported in Completely Built‑Up (CBU) form with a value not exceeding $75,000, as determined under Section 25 of the Customs Act, 1969.

Vehicles valued between $75,000 and $110,000 will incur a 30 percent excise duty, while those above $110,000 will face a 40 percent duty.

The Device Identification, Registration and Blocking System (DIRBS) levy on imported handsets will be payable in instalments, but all instalments must be cleared before the close of the financial year in which the import occurs.

Taxpayers with annual turnover up to Rs200 million may opt out of the fixed tax regime, provided they submit a final, irrevocable certificate to the Tax Commissioner before filing their 2027 tax returns.

The minimum value‑addition tax on imported coal is set at one percent, conditional on the coal being supplied exclusively and directly to independent power producers.

Under the new budget, private equity and venture‑capital funds registered under the Private Funds Regulations, 2015 qualify for income‑tax exemption on their earnings, provided that at least 90 percent of the fund’s accounting income—after deducting accumulated losses and unrealised capital gains—is distributed to unit holders, certificate holders or shareholders.

This exemption does not apply if the fund is formed to acquire a publicly listed company that has not been converted to a private limited entity following the acquisition.

Furthermore, for steel melters, re‑rollers and composite units, tax will be levied on the basis of electricity consumption per unit, including power generated by captive plants or alternative sources, at rates prescribed by the Federal Board of Revenue.

The collected tax will serve as an adjustable input tax claimable in the monthly return of the payment period. The per‑unit sales tax rate will be determined by the FBR using the minimum notified price and industrial electricity‑consumption benchmarks relative to per‑ton steel output.

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