BUDGET 2026-27: Finance Bill sails through NA

• Proposed FED on mineral water, hydration drinks with low sugar content scrapped
• Local airlines get sales tax break on import of aircraft parts
• Excise duty on EVs to be linked to their dollar value; zero for cars valued under $75,000
• Traders with turnover of up to Rs200m may opt out of fixed tax regime
• Tax exemption granted for income derived from private equity, venture capital funds

ISLAMABAD : After the opposition walked out of the lower house, the National Assembly on Tuesday passed the Finance Bill 2026, while supplementary grants for the outgoing fiscal year will be tabled for approval today (Wednesday).

After all seven amendments moved by opposition members were rejected by a majority vote, Finance Minister Muhammad Aurangzeb moved the Finance Bill, including the amendments suggested by the National Assembly Standing Committee on Finance.

Some of the key changes made to the bill since its introduction in parliament include the abolition of duties on mineral water or hydration drinks, sales tax exemption for local airlines on the import or lease of aircrafts, and an amendment to the duties imposed on electric cars or SUVs imported into the country.

The government has done away with the proposed 20 per cent Federal Excise Duty (FED) on mineral waters, aerated waters, hydration drinks or electrolyte beverages with artificial sweetener or sugar content below 5g/100 ml.

Previously, all kinds of mineral waters, aerated waters, hydration drinks or electrolyte beverages were subjected to 20pc FED, irrespective of the artificial sweetener or sugar content.

The updated finance bill also included permission for all airlines operating in the country to avail sales tax exemption on the import or lease of aircrafts and their parts from July 1, 2027, which was only granted to PIA in the original bill, tabled on June 12.

EVs and SUVs

The amended Finance Bill 2026 also showed that excise duty on imported electric cars would be calculated based on their values to be calculated US dollars.

No FED will be applicable on electric cars and electric SUVs, imported in Completely Built-Up (CBU) condition with a value not exceeding $75,000, as determined under section 25 of the Customs Act, 1969.

Meanwhile, 30pc excise duty would be applicable on electric cars and electric SUVs valued between $75,000 and $110,000, while those whose value exceeds $110,000 would face 40pc excise duty.

Separately, the Device Identification, Regist­ration and Blocking System (DIRBS) tax on imported phones will now be paid in instalments, but all instalments have to be paid before the end of the financial year in which the import is made.

The amended Finance Bill 2026 approved by the NA also revealed that persons having turnover up to Rs200 million may opt out of the fixed tax regime, subject to a final and irrevocable certificate filed with the Tax Commissioner before filing their returns for the tax year 2027.

As per the amended bill, the minimum rate of value addition tax shall be one percent in the case of import of coal, subject to the conditions that such imported coal is exclusively and directly supplied to Independent Power Producers.

Some clauses relating to the Climate Support Levy in the original Finance Bill have been dropped through amendments proposed in the Petroleum Products (Petroleum Levy and Climate Support Levy) Ordinance.

Tax exemption

Under the amended bill, income tax exemptions wou­ld be available on any income derived by a private equity and venture capital fund registered under Private Funds Regulations, 2015.

This will be applicable where not less than 90pc of the accounting income of that year, as reduced by accumulated losses and unrealised capital gains, is distributed by the private equity and venture capital fund to its unit or certificate holders or shareholders.

This exemption will not be available if the private equity and venture capital fund is established to acquire a public listed company, whose status has not been changed to pri­­vate limited company on the acquisition.

In addition, the amended bill says that for steel melters, re-rollers and composite units, tax will be collected on the basis of per unit electricity consumed, including use of electricity produced by a captive power plant or through any other alternative source of energy at the rate or rates as prescribed by FBR.

The tax so collected shall be an adjustable input tax, to be claimed in the return of the month in which such payment is made. The per unit sales tax shall be determined by the FBR on the basis of minimum notified price and the industrial benchmarks of consumption of electricity against per ton production of steel products.

Published in Dawn, June 24th, 2026 ...