BUDGET 2026-27: Finance Bill sails through NA

Lead

Pakistan's National Assembly passed the Finance Bill 2026 on Tuesday after the opposition walked out of the lower house, according to Dawn. The passage follows the National Assembly Standing Committee on Finance's approval of the bill after making around 30 major amendments.

The bill now includes a range of measures affecting mobile phone imports, manufacturing oversight, the aviation sector, electric vehicles, and tax administration. The amendments reflect revisions to rates, exemptions tricks and enforcement mechanisms.

The assembly also rejected all seven amendments proposed by opposition members before Finance Minister Muhammad Aurangzeb moved the Finance Bill, including the changes recommended by the Standing Committee on Finance. Supplementary grants for the outgoing fiscal year are due to be tabled for approval on the following day.

Coverage comparison

Two separate reports from Dawn track the bill's passage through Pakistan's parliament. The first, published after the standing committee's session, described the panel approving the Finance Bill 2026 after making around 30 major amendments. The second, published the next day, reported that the lower house had passed the bill into law, but only after the opposition had walked out of the chamber and its seven amendments had been rejected.

A significant change to the bill since it was introduced: local airlines are now entitled to a sales tax break on the import or lease of aircraft and spare parts. This benefit had previously applied only to certain categories. The revised bill also scraps an earlier proposal to impose a 20 per cent Federal Excise Duty on mineral water, aerated water, and low-sugar hydration drinks.

The committee phase introduced a new collection mechanism for taxes on imported mobile phones. Under the amended bill, the Pakistan Telecommunication Authority (PTA) will collect an instalment-based tax on imported handsets through its device system. In the same package, manufacturers will be placed under mandatory digital monitoring: they will not be allowed to remove or sell taxable goods without affixing tax stamps or barcodes and integrating with production monitoring systems. Tax stamps and barcodes are required for goods clearance.

The committee also inserted provisions covering aviation and electric vehicles. A duty waiver on aircraft and parts imports was approved for Pakistani-registered airlines from July 1. Electric vehicles valued at up to $75,000 will attract zero duty, while excise duty on EVs is to be linked to their dollar value. The bill also directs the State Bank of Pakistan to create a centralised repository of banking data for tax purposes.

During Tuesday's session, the opposition walked out of the lower house after all seven of its amendments were rejected by a majority vote, Dawn reported. Finance Minister Muhammad Aurangzeb then moved the Finance Bill, including the standing committee's amendments, for approval. Supplementary grants for the outgoing fiscal year are expected to be tabled for approval on Wednesday.

Some of the amendments made by the standing committee include an instalment-based tax on imported mobile phones, which will be collected through the Pakistan Telecommunication Authority's device system. Digital monitoring has been made mandatory for manufacturers, who will not be allowed to remove or sell taxable goods without integrating with production monitoring systems. Tax stamps and barcodes are now required for goods clearance. Additionally, the State Bank of Pakistan will create a tax data repository using banking data.

The bill also includes a duty waiver on aircraft and parts imports for Pakistani-registered airlines, effective July 1. Local airlines will receive a sales tax exemption on the import of aircraft parts, according to Dawn, with this measure applying from July 1, 2027. Excise duty on imported electric vehicles will be linked to their dollar value, with zero duty applied to cars valued up to $75,000.

The proposed 20 per cent Federal Excise Duty on mineral water, hydration drinks, and electrolyte beverages with low sugar content was scrapped, along with a similar levy on similar products containing artificial sweeteners. Traders with a turnover of up to Rs200 million may opt out of the fixed tax regime, and income derived from private equity and venture capital funds has been granted tax exemption.

Key Claims

• The National Assembly Standing Committee on Finance approved the Finance Bill 2026 after making around 30 major amendments, as reported by Dawn.
• The National Assembly passed the Finance Bill 2026 after the opposition walked out, per Dawn's report.
• An instalment-based tax on imported mobile phones will be collected via the State Bank of Pakistan's device system.
• Digital monitoring is mandatory for manufacturers, who cannot remove or sell taxable goods without tax stamps, barcodes, or integration with production monitoring systems.
• A duty waiver on aircraft and parts import was approved for Pakistani-registered airlines, starting July 1.
• Zero duty applies to electric vehicles priced up to $75,000; excise duty on EVs will be linked to their dollar value, with higher duties on vehicles above that threshold.
• The State Bank of Pakistan will create a tax data repository.
• The proposed Federal Excise Duty on mineral water and hydration drinks with low sugar content was scrapped.
• Local airlines receive a sales tax exemption on the import of aircraft parts.
• Traders with turnover up to Rs200 million may opt out of the fixed tax regime.
• Income from private equity and venture capital funds is tax-exempt.
• Supplementary grants for the outgoing fiscal year are to be tabled for approval.