LAHORE – The federal government approved sweeping new tax measures under the Finance Bill 2026-27, imposing fresh advance taxes on property transactions, higher levies on large corporate earnings, and a new withholding tax framework for social media income.
The impact is expected to be felt in Pakistan’s real estate sector, where both buyers and sellers will face additional tax burdens from July 1, 2026. Under the new provisions, property sellers will be required to pay an advance tax of 2.75 percent on the total sale value of a property, while buyers will be charged 1.25 percent advance tax on the fair market value of the property being purchased.
The measures are designed to enhance documentation and increase tax collection from one of the country’s largest but historically under-documented sectors.
Industry experts warn that the additional taxes could significantly raise transaction costs, potentially slowing market activity and increasing the financial burden on both investors and end-users.
Finance Bill also introduces fresh taxation measures targeting high-income corporate entities. Banking companies and fertilizer manufacturers earning more than Rs150 million annually will face a 10 percent tax, while all other corporate entities with annual income exceeding Rs500 million will be subject to an 8 percent tax.
Government officials argue that the new taxes are necessary to strengthen revenue generation, improve fiscal discipline, and support broader economic stabilization efforts. However, business groups are expected to closely scrutinize the measures, citing concerns over rising operational costs and their potential impact on investment.
In another landmark development, the government moved to expand its tax reach into Pakistan’s rapidly growing digital economy. Through amendments to the Income Tax Ordinance, a new Section 151B has been inserted, making income earned through social media platforms subject to withholding tax.
The move shows government’s intention to bring digital content creators, influencers, and other online earners into the formal tax net, reflecting a broader global trend of taxing digital income streams.
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