The National Assembly Standing Committee on Finance on Monday proposed several amendments to the Finance Bill, 2026, including lower tariffs for multiple categories of vehicles and tax exemptions for various organizations.
Finance Minister Muhammad Aurangzeb is set to lay the Finance Bill, 2026 before the National Assembly for a vote today (Tuesday), with the committee’s proposals to be adopted unless rejected by the Lower House.
The committee has proposed lowering tariffs for the automobile sector—apart from vehicles with engines 2,000cc and above—bringing them in line with the government’s National Tariff Policy aimed at trade liberalization. According to the proposed measures, the maximum import taxes on cars would reduce from 156% to 74% for vehicles of up to 2,000cc. The maximum tariff on vehicles above 1,800cc would be fixed at 74%, while cars with engine capacity of 2,000cc and above would face an 86% federal excise duty. Vehicles exceeding 3,000cc would face a tax rate of 92%.
The proposal calls for a tariff reduction from 91% to 57% for vehicles in the 1,500- 1,800cc category, while 1,000-1,500cc vehicles would see a cut from 76% to 52%. Vehicles of 850-1,000cc would have a maximum tariff imposition of 47%, while the maximum tariff on vehicles up to 850cc, bikes and vehicle bodies has been proposed to be reduced from 66% to 42%.
The committee has suggested exempting four organizations from income tax, comprising the Quaid-e-Azam Mazar Management Board, the Make-a-Wish Foundation, provincial employees’ social security institutions, and Workers Welfare Fund organizations.
Further, the committee has proposed allowing traders to exit the fixed income tax regime from tax year 2027, just a year after the initiative’s introduction. Under the government’s scheme, traders with turnover of up Rs. 200 million have the option to pay only 1% of sales in income tax and a minimum Rs. 25,000 per annum in return for exemption from audit and becoming part of the digital economy.
Additionally, the committee has proposed 1% sales tax on the import of coal for independent power producers and rejected reducing the minimum income tax rate for terminal service providers to 12%.
The committee also proposed not charging the Rs. 80/liter excise duty on petrol solvents for the import of white spirit and solvent oil purchased only for in-house consumption if both the importer and recipient of supplies hold licenses issued by the Department of Explosives. It has further rejected a proposal to impose late payment surcharges on oil marketing companies failing to timely deposit the petroleum levy with the treasury. Additionally, it has approved exempting sales tax on both wheat and rice bran.
The lawmakers rejected a proposal to impose up to Rs. 100,000 in fines for late filing of returns while adding a condition that late filers would not be able to register any new property for six months.
The committee has proposed charging Rs. 30/unit sales tax on the steel sector and has extended tax exemptions to the entire aviation sector. It has further called for allowing citizens to pay tax on mobile phones in instalments within a year of purchase.
Also on Monday, the National Assembly concluded its debate on the Finance Bill, 2026, approving 135 demands for grants for the upcoming fiscal year. Of the opposition’s 587 cut motions, all were rejected with a majority vote.