The government has set a tax collection target of Rs. 15.264 trillion for the Federal Board of Revenue (FBR) in fiscal year 2026-27, while also proposing tax relief for salaried individuals, reductions in property transaction taxes and business-class travel duties, and new levies on luxury electric vehicles and social media income.
Presenting the federal budget for the upcoming fiscal year, Finance Minister Muhammad Aurangzeb unveiled a broad package of tax reforms aimed at increasing revenue while providing relief to selected sectors and income groups.
In a briefing after the budget presentation, FBR officials said the tax authority plans to generate Rs. 650 billion through enforcement and compliance measures during the next fiscal year.
The government has proposed significant relief for salaried taxpayers by reducing tax rates across several income slabs and abolishing the additional 10% surcharge previously imposed on higher-income salaried individuals. In an effort to stimulate activity in the real estate sector, the government also proposed reducing withholding taxes on the purchase and sale of property.
The budget further seeks to lower the Federal Excise Duty (FED) on international business-class air travel. For business-class tickets to the United States, the FED has been proposed at Rs. 50,000, down from Rs. 350,000. Similarly, the duty on business-class travel to Europe, Australia and Far Eastern destinations would be reduced to Rs. 40,000 from Rs. 210,000.
At the same time, the government has proposed higher taxation on luxury electric vehicles. Electric vehicles valued above Rs. 20 million would become subject to FED, while EVs costing more than Rs. 30 million would face a 40% excise duty. Vehicles with engine capacities exceeding 3,000cc would be subject to an 81% FED under the proposed measures.
The budget also introduces a new taxation framework for social media content creators. Under the proposal, individuals earning income from social media platforms would be allowed to deduct up to 30% of eligible expenses before taxation.
For the corporate sector, the government proposed relief in the Super Tax regime, abolishing it for businesses with annual income of up to Rs. 500 million.
The budget proposes a 15% tax on professional services, including those provided by doctors, lawyers and other professionals. In the tobacco sector, the government proposed a sharp increase in FED on e-liquid used in electronic cigarettes, raising it from Rs. 10,000/kg to Rs. 16,500/kg.
To broaden the sales tax base, the government has proposed imposing sales tax on basis of printed retail prices for 21 categories of goods. Officials estimate that the measure alone could generate an additional Rs. 50 billion in revenue during FY27.