ISLAMABAD (Kashmir English): The federal government has prepared a proposal to significantly reduce the withholding tax on the purchase and sale of property to promote the real estate and construction sector ahead of the federal budget 2026-27.
According to sources, a proposal is under consideration to reduce the tax rate on the purchase of property for filers from 1.5 per cent to 0.25 per cent, while the tax on the sale is reduced from 4.5 percent to 1.5 percent.
The government is of the opinion that the reduction in taxes will increase activities in the property market and increase overall tax collections.
The International Monetary Fund (IMF) has also been informed in this regard, sources said.
It was further reported that this relief will be for filers only, while it is proposed to maintain the current tax rate of 10.5 percent on the purchase and sale of property for non-filers.
Industry stakeholders say the sector, which is linked to more than 80 industries, has been under pressure due to additional taxes and declining business activity.
They believe meaningful relief in the upcoming budget could stimulate investment, increase government revenues, and create new employment opportunities.
The federal budget for the upcoming fiscal year 2026-27 is likely to be presented in the National Assembly on June 5.
Important details in Budget 2026-27
Important details of the budget negotiations between Pakistan and the International Monetary Fund (IMF) have come to light. Import, regulatory, and customs duties on various items are likely to be reduced in the new budget.
Sources have said that there is a possibility of a reduction in regulatory duty and additional customs duty on imported items in the upcoming budget, while duty on imported vehicles may also be reduced.
There is a possibility of a reduction in the tariff imposed on raw materials for the export industry and a reduction in taxes on 5G machinery and equipment in the telecom sector.
Hundreds of raw materials for the export industry are likely to be cheaper in the budget.
On the instructions of the Prime Minister, the Ministry of Industry and Commerce has prepared a draft of the National Tariff Policy. Tariffs will be reduced according to IMF targets so that the local industry can be competitive.
Sources say that in the upcoming budget, additional customs duty may be reduced on 3,149 tariff lines of imported goods, while regulatory duty is also likely to be reduced on more than 1,900 tariff lines of imported goods.
