Finance Bill: Pakistan panel approves sweeping Finance Bill 2026 reforms after 30 major amendments

The Finance Bill has been significantly revised after Pakistan’s National Assembly Standing Committee on Finance approved the Finance Bill 2026, introducing around 30 major amendments that reshape key tax, customs and enforcement frameworks ahead of the final vote.

The National Assembly Standing Committee on Finance finalized its report on Monday and forwarded it to the lower house for consideration, where lawmakers will vote on each clause before the bill is passed. The Senate Standing Committee on Finance had earlier submitted 123 recommendations on the proposed legislation.

The committee approved a range of structural reforms, including new tax facilitation measures for imported mobile phones. It proposed allowing taxpayers to pay duties in installments through the Pakistan Telecommunication Authority’s device identification system. The panel also recommended adjustments to tax rates for wholesalers, reductions in penalties, and revisions to incentives for electric vehicle imports.

Several enforcement reforms were also introduced. Authorities would implement digital production monitoring, faceless tax assessments, and algorithm-based dispute resolution systems to reduce direct interaction between taxpayers and officials. These measures were designed to strengthen compliance and improve transparency in tax administration.

The committee also approved stricter customs controls, requiring ministerial approval for board-level decisions and mandating public procurement procedures. The limitation period for customs action was reduced from 10 years to five, while safeguards were introduced to ensure affected parties can present their case before asset confiscation, except in urgent cases.

A major reform would allow the State Bank of Pakistan to establish a centralized digital repository of banking data for tax-related monitoring through unique identifiers, expanding access to financial transaction records for compliance purposes.

The bill also introduced revised tax structures across multiple sectors. A 5 percent withholding tax was proposed on income earned through social media platforms, while export-oriented businesses earning over 80 percent of revenue from exports would be exempt from super tax.

For the automotive sector, revised federal excise duties were proposed for imported electric vehicles. Vehicles priced up to $75,000 would remain exempt, those between $75,000 and $110,000 would face a 30 percent duty, while vehicles above $110,000 would be taxed at 40 percent. Separate high duties were also proposed for larger imported vehicles based on engine capacity.

Penalties for non-compliance were tightened, with fines linked to business turnover and stricter rules for repeat offenders. The committee also proposed tax exemptions for select institutions, including social welfare organizations and charitable foundations, while expanding benefits for private equity and venture capital funds under specific conditions.

The bill now moves to the National Assembly for final approval, where each clause will be debated and voted on individually before enactment. Two members of the committee submitted dissenting notes on parts of the report.