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CategoriesNews Budget Economy

Pakistan Budget 2026-27 May Be Delayed to June 10 Amid $7 Billion IMF Talks

ISLAMABAD: Pakistan’s federal budget for fiscal year 2026-27 is unlikely to be presented on June 5, as previously expected, because some fiscal measures are still being discussed with the International Monetary Fund.

According to Reuters, a government source and local media reported on Wednesday that the budget may now be presented on June 10. The source said the delay is mainly linked to unresolved matters with the IMF over fiscal space, including funds that provinces may need to give up for federal spending.

The government has not officially announced a reason for the possible delay. Pakistan’s finance ministry did not immediately respond to Reuters’ request for comment.

Despite the expected delay in the budget presentation, the parliamentary session scheduled for June 5 is still expected to take place. The session may allow the government and opposition to discuss budget-related issues before the formal presentation.

Pakistan is currently under a $7 billion IMF bailout program, which has helped stabilize the economy after a difficult financial period. Any delay in finalizing the budget reflects the importance of IMF approval in shaping Pakistan’s spending and revenue plans.

The upcoming budget is being closely watched by businesses, investors, and the public, as the government is expected to balance demands for economic relief with the need to meet revenue targets. Key sectors, including real estate and construction, are hoping for tax relief, but final decisions may depend on the outcome of continuing talks with the IMF.

The budget delay adds uncertainty at a time when Pakistan is trying to maintain economic recovery while managing pressure on public finances.

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CategoriesSpecial Report Construction Economy News Property Taxes Real Estate Real Estate Investment Tax

Pakistan Real Estate Sector Expects Major Tax Relief in Budget FY 2026-27

ISLAMABAD — Pakistan’s real estate and construction sectors are expecting major tax relief in the upcoming federal budget for fiscal year 2026-27, as the government considers proposals to reduce property-related taxes and revive investment activity.

The budget, expected to be presented on June 5, could bring significant changes for property buyers, sellers, investors, and overseas Pakistanis, according to industry representatives and media reports.

Government Signals Possible Relief in Real Estate Taxes

The real estate sector has been under pressure for several years due to higher taxes, rising costs, and a slowdown in property transactions. Industry stakeholders say the sector is directly linked with more than 80 other industries, including cement, steel, paint, glass, electrical fittings, tiles, transport, and construction services.

They argue that when real estate activity slows down, many connected businesses also suffer. For this reason, the sector is urging the government to reduce taxes in the upcoming budget to encourage buying, selling, and construction activity.

Prime Minister Shehbaz Sharif has also reportedly hinted at relief measures for the construction and real estate sectors during meetings with business representatives. These signals have increased expectations that the government may announce major policy changes in the new budget.

Key Tax Demands from the Sector

Real estate stakeholders are demanding reductions in withholding tax, capital gains tax, and rental income tax. They say the current tax structure has discouraged investment and reduced the number of property transactions.

Abolition of Section 7E

One of the sector’s main demands is the abolition of Section 7E of the Income Tax Ordinance. Section 7E imposes tax on deemed income from immovable property. In simple terms, it allows tax to be charged on an assumed income from property, even if the property owner has not actually earned rent from it.

Industry representatives say this discourages documented investors and creates an unfair burden on property owners. They have also called for property-buying and selling taxes to be reduced to 1%.

Business leader Kashif Chaudhry has said that Pakistan’s economy cannot fully recover without restoring activity in the real estate market. He argued that reducing taxes would increase transactions and ultimately help the government collect more revenue.

FBR Proposals Under Consideration

According to reports, the Federal Board of Revenue has prepared proposals to provide relief to the real estate sector. These proposals include reducing taxes on property purchases and sales, while also making investment easier for overseas Pakistanis and local investors.

Under one reported proposal, withholding tax on property purchases for tax filers could be reduced from 1.5 percent to 0.25 percent. Tax on property sales may also be reduced from 4.5 percent to 1.5 percent.

The government has also reportedly briefed the International Monetary Fund on these proposed tax reductions. This is important because Pakistan’s budget decisions are closely linked with IMF targets on revenue collection and fiscal discipline.

FPCCI Calls for Wider Reform

The Federation of Pakistan Chambers of Commerce and Industry has also supported tax relief for the real estate and construction sectors. FPCCI President Atif Ikram Sheikh has said that taxes imposed under Sections 236C and 236K are expected to be abolished.

He has also called for the removal of Section 7E, describing it as a long-standing demand of the business community.

The FPCCI has further proposed the creation of a Real Estate Regulatory Authority, known as RERA, in Pakistan. The chamber says such an authority would help regulate the sector, improve transparency, and protect investors.

In its shadow budget proposals, FPCCI has suggested reducing real estate taxes to a uniform 0.5 percent. The chamber believes this would encourage investment and help revive economic activity.

Experts Urge Balanced Policy

Tax experts and economists say the government should reduce taxes that discourage transactions, but they also warn that reforms must be carefully designed.

Experts Huzaima Bukhari, Dr. Ikramul Haq, and Abdul Rauf Shakoori have argued that Pakistan’s tax system needs broader reform. They say the country should reduce pressure on productive economic activity while improving taxation of idle and speculative assets.

Their view is that transaction taxes should be rationalized, but the government should also modernize land records, improve property valuation systems, and tax speculative urban land more effectively.

Other analysts have warned that Pakistan’s room for tax relief may be limited because of IMF conditions. If the government reduces taxes in one area, it may need to raise revenue from another area to meet fiscal targets.

Overseas Pakistanis Seen as Key Investors

The proposed relief is also being viewed as important for overseas Pakistanis. Industry representatives say lower taxes and simpler procedures could encourage Pakistanis living abroad to invest more in property and construction projects.

They believe this could bring more foreign exchange into the country through remittances and investment. For Pakistan, where remittances play an important role in supporting the economy, this could be a major benefit.

FPCCI Senior Vice President Saqib Fayyaz Magoon has also said that real estate can help attract more foreign exchange if investors are given confidence and clear rules.

Revenue Challenge for the Government

The government faces a difficult policy choice. On one hand, lower taxes may increase property transactions and revive economic activity. On the other hand, the government must also meet revenue targets and satisfy IMF conditions.

FBR data shows that withholding tax collection increased during the current fiscal year. However, higher taxes have also contributed to a decline in capital gains tax collection compared to the previous year. This shows that while higher rates may increase some tax collections, they can also reduce overall market activity.

Real estate stakeholders argue that lower rates could bring more people into the documented economy and increase tax collection through higher transaction volume.

Budget Could Mark Turning Point

The upcoming budget is being closely watched by builders, developers, property buyers, sellers, and overseas investors. If the government accepts key proposals, the real estate sector could receive one of its biggest relief packages in recent years.

However, experts say tax cuts alone will not be enough. They believe the government must also improve regulation, digitize land records, update property valuation systems, and discourage speculative investment in idle land.

For now, the sector is waiting for the June 5 budget announcement. The final decision will show whether the government is ready to make a major policy shift for real estate and construction, or whether fiscal pressure will limit the scale of relief.

References

Bukhari, H., Haq, I., & Shakoori, A. R. (2026, May 15). Budget 2026–27 & fiscal justice. Business Recorder. https://www.brecorder.com/news/40421212

Bukhari, H., Haq, I., & Shakoori, A. R. (2026). Budget FY27: Out of the box solutions. Business Recorder. https://www.brecorder.com/news/amp/40422269

Federation of Pakistan Chambers of Commerce and Industry (FPCCI). (n.d.). Section 7E of Income Tax Ordinance should be abolished: Atif Ikram Sheikh. FPCCI Official Website. https://fpcci.org.pk/section-7e-of-income-tax-ordinance-should-be-abolished-atif-ikram-sheikh/

Khan, Z. A. (2026, June 1). Real estate sector seeks major tax relief in the budget. SAMAA TV. https://www.samaa.tv/2087351329-real-estate-sector-seeks-major-tax-relief-in-budget

Khyber News. (2026, June 1). Pakistan Federal Budget 2026-27 analysis raises questions over inflation, taxes, and IMF influence. Khyber News. https://khybernews.tv/pakistan-federal-budget-2026-27-analysis-raises-questions-over-inflation-taxes-and-imf-influence/

Pakistan Observer. (2026, June 1). Budget 2026–27: Big relief expected for property buyers, sellers in Pakistan. Pakistan Observer. https://pakobserver.net/budget-2026-27-big-relief-expected-for-property-buyers-sellers-in-pakistan/

Pakistan Observer. (2026). FPCCI unveils Pakistan’s first shadow budget for 2026-27. Pakistan Observer. https://pakobserver.net/fpcci-unveils-paks-first-shadow-budget-for-2026-27/

Siddiqui, S. (2026, June 1). Major tax relief expected for real estate in Budget 26-27. Bloom Pakistan. https://bloompakistan.com/major-tax-relief-expected-for-real-estate-in-budget-26-27/

Talreja, S. (2025, June 11). In Pakistan targets passive incomes, foreign e-commerce in a push for a $50 billion tax haul. Arab News. https://www.arabnews.com/node/2604103/amp

TechJuice. (2026, June 1). Major property tax relief likely in Pakistan Budget 2026-27. TechJuice. https://www.techjuice.pk/major-property-tax-relief-likely-in-pakistan-budget-2026-27/

For more news on real estate and Special Reports, visit Chakor Ventures.

CategoriesNews Construction Developments Real Estate Urban Developments & Planning

Peshawar Road Underpass Project Stalls as Monsoon Deadline Looms

RAWALPINDI: The Punjab Communication and Works (C&W) Department has yet to break ground on three planned underpasses along Peshawar Road, with the monsoon season now less than a month away.

The underpasses, to be built at Race Course Park, Army Graveyard, and Chairing Cross, are central to a 25-kilometre signal-free corridor linking the Islamabad Expressway to Motorway Chowk. Once operational, the corridor aims to cut travel time between the two points to 15–20 minutes.

While the GPO Chowk interchange was completed last year and the Kutchery Chowk remodelling wrapped up in May, formal construction on the three remaining structures has not commenced. Completion is now projected in the next fiscal year.

Officials attribute the delay to ongoing preparatory work. The executing agency is prioritising drainage infrastructure and service road construction before excavation begins, so that monsoon rains do not disrupt the project mid-course.

Formal digging is expected to begin within one to two weeks, after which completion is estimated at two months. Traffic police have been asked to prepare a revised traffic management plan, and the Rawalpindi Cantonment Board has been directed to carry out patchwork on designated alternative routes.

On the utility front, Executive Engineer Qamar Saqib of the Punjab Highway Department confirmed that the relocation of Sui gas pipelines, telephone cables, and electricity infrastructure along the Race Course to Qadir Motors stretch has been completed.

Construction experts, however, warn that excavation during monsoon rains risks waterlogging in open trenches, potential rework, and restricted use of heavy machinery, all of which could extend timelines considerably.

Whether authorities can deliver within their stated window remains an open question for the thousands of commuters dependent on this corridor daily.

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CategoriesNews Construction Developments Economy Real Estate Investment

RDA Launches Comprehensive Assets Management Drive to Shield Vacant Properties

RAWALPINDI: The Rawalpindi Development Authority (RDA) has introduced a new Assets Management initiative aimed at protecting public land, generating sustainable revenue, and making better use of long-neglected properties across its housing schemes.

The initiative was formally unveiled at a high-level briefing held at the RDA Conference Room, chaired by the Commissioner of Rawalpindi and the Director General of RDA. Senior officials from finance, planning, engineering, and estate management departments attended the session, reflecting the broad institutional commitment behind the programme.

Director Estate Management Maleeha Iesar led the presentation, outlining a three-part strategy focused on: preventing illegal encroachment on RDA-owned land; developing vacant properties to create steady income for the Authority; and improving land use across 13 housing schemes currently under RDA’s ownership.

The initiative comes in response to growing concerns over the gradual encroachment of open spaces within established housing colonies, a problem that has steadily reduced both public utility and the Authority’s land assets over the years.

In response to the briefing, the Commissioner and DG RDA directed all department heads to extend full support to the Estate Management Directorate. They also ordered the prompt preparation and submission of design drawings for proposed construction on identified sites, emphasising the need for swift action across all relevant departments.

The meeting concluded with unanimous agreement among all officials to move forward with the plan. Authorities indicated that construction and development activities are expected to begin once the designs receive formal approval.
Officials noted that this initiative signals a broader shift in RDA’s approach, moving from simply owning land to actively managing and developing it. The programme is also expected to serve as a model for urban land management across Punjab.

RDA Launches Comprehensive Assets Management Drive to Shield Vacant Properties
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Pakistan, ADB Set to Transform Railways
CategoriesNews Developments Economy Transport Urban Developments & Planning

Pakistan, ADB Set to Transform Railways with $1.2 Billion ML-1 Deal

ISLAMABAD: Pakistan and the Asian Development Bank (ADB) have agreed to ensure the timely completion of documentation and procedural formalities to accelerate the implementation of the Main Line-1 (ML-1) railway project, with a focus on the Karachi-Rohri section.

A high-level meeting chaired by Minister for Economic Affairs Ahad Cheema reviewed the project’s implementation framework and deliberated on measures to fast-track progress. Secretary Economic Affairs Muhammad Humair Karim and Secretary Railways Mazhar Ali Shah briefed the participants on ongoing preparatory arrangements, while ADB Country Director Emma Fan and senior Bank officials also took part in the discussions.

The ADB is expected to approve a financing facility of approximately USD 1.2 billion to rehabilitate the Karachi-Rohri section of Pakistan Railways’ ML-1 project. The Bank is also planning to engage other development partners as co-financiers for the remaining corridor stretching from Karachi to Peshawar.

Minister Cheema directed the Ministry of Railways to accelerate the documentation process in close coordination with the ADB and the Economic Affairs Division. He underscored that Prime Minister Shehbaz Sharif is keen to hold the groundbreaking ceremony for the ML-1 project this year, and that securing ADB funding in the upcoming fiscal year remains a key government priority.

The Minister further instructed the Ministry of Railways to work in tandem with the Planning Division to ensure readiness of the PC-1 and all other mandatory project requirements, emphasising efficiency and transparency throughout the process.

ADB Country Director Emma Fan reaffirmed the Bank’s commitment to supporting Pakistan in expediting documentation and related formalities. She confirmed that the ADB would ensure the timely hiring of the PRF consultant and would endeavour to minimise the project review timeline.

ML-1 is regarded as a strategically significant initiative that will substantially improve freight movement and strengthen railway services nationwide.

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SBCA
CategoriesNews Construction Real Estate

SBCA Launches One-Window Digital Revolution

KARACHI: The Sindh Building Control Authority (SBCA) is set to transform its construction permit services by introducing a comprehensive digital one-window system, marking a significant milestone in Sindh’s e-governance journey.

The newly introduced system is designed to serve a broad spectrum of stakeholders, including citizens, builders, architects, and engineers, by replacing traditional, paper-heavy processes with a fully integrated digital framework.

Key features of the system include online application submission, e-payment of challans, real-time application tracking, SMS alerts, digital approvals, e-certification, and inter-departmental coordination. A dedicated mobile application and e-portal will further ensure round-the-clock accessibility for users across the province.

The SBCA has structured the permit process into five distinct categories to ensure clarity and efficiency. Category One cases, which cover residential plots up to 399 square yards and bungalows exceeding that threshold, will be processed through the single-window facility within a defined 15-day turnaround, provided all documentation is complete and legal requirements are duly met.

Category Two and Three cases will continue to be handled through respective district offices in accordance with prevailing rules. Category Four cases encompassing public-sale, public-use, and industrial buildings, along with Category Five cases involving major town planning and land development projects, will both be routed through the centralised one-window cell.

This initiative is part of a broader directive by the Government of Sindh to fully automate all four categories of construction permits within one month, reflecting a strong institutional commitment to reducing bureaucratic delays, curbing corruption, and enhancing public trust in regulatory bodies.

By digitising its core services, the SBCA aims to create a more accountable, responsive, and citizen-friendly regulatory environment, one that aligns with modern urban governance standards and supports Sindh’s long-term development goals.

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Budget 2026-27
CategoriesNews Budget Economy

Budget 2026-27: Pakistan and IMF Close In on Fiscal Agreement

ISLAMABAD: Pakistan’s federal budget negotiations with the International Monetary Fund have stretched beyond their original deadline, with both sides working to finalise key fiscal parameters ahead of the anticipated budget presentation on June 5, 2026.

The IMF mission, which had been scheduled to conclude discussions on Wednesday, extended its stay in Islamabad to resolve a handful of remaining outstanding issues. Sources familiar with the matter confirmed that most points of contention have been settled, signalling broad alignment between the two parties on the fiscal framework for the upcoming year.

On the revenue front, the Federal Board of Revenue has been assigned an ambitious collection target of Rs15.264 trillion for the next fiscal year, with an interim benchmark of Rs7.022 trillion due by December 2026. The Fund has recommended an 18% increase in petroleum levy collections, pushing the total petroleum development levy target to Rs1.73 trillion, with the per-litre levy potentially rising to Rs100. Additional revenues of Rs 95 billion are expected through tax audits, while Rs 50 billion in sector-specific recoveries are being sought from sugar, cement, tobacco, and fertiliser industries.

Provinces have been directed to contribute meaningfully to fiscal consolidation, with a combined surplus target of nearly Rs2 trillion and an additional revenue generation requirement of Rs430 billion. Provincial development allocations, meanwhile, are proposed to increase from Rs2.1 trillion to Rs2.5 trillion.

On the expenditure side, defence spending is set to rise modestly to Rs2.665 trillion, while debt servicing remains the dominant fiscal pressure, with interest payments projected at Rs7.8 trillion. Pakistan’s total external financing requirements are estimated at $21.2 billion.

In a notable social measure, quarterly disbursements under the Benazir Income Support Programme are set to increase from Rs14,500 to Rs18,000. Public sector development spending has been projected at approximately Rs. 968 billion.

The IMF has also called for Rs430 billion in new tax measures and a phase-out of incentives for special economic zones by 2035. Looking ahead, economic growth is projected at 3.5% with average inflation expected at 8.4%.

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CategoriesReal Estate Investment News Property Property Taxes Real Estate

FBR Revises Property Valuations for DHA Lahore and Rawalpindi; Eight Cities Now Covered Under Updated Tax Framework

ISLAMABAD — The Federal Board of Revenue has updated the official valuations of properties in Defence Housing Authority areas of Lahore and Rawalpindi, through two separate orders issued on Tuesday. The revisions will directly affect the amount of tax that buyers and sellers are required to pay when a property changes hands in these localities.

The updates were formalised through Statutory Regulatory Orders S.R.O. 876(I)/2026 for Lahore and S.R.O. 877(I)/2026 for Rawalpindi, both signed by Muhammad Amin Qureshi, Secretary Rules and SRO, Revenue Division. They amend valuations originally set in October 2024 and bring the total number of cities where the FBR has revised property benchmarks in recent months to eight, following similar exercises carried out for Islamabad and other major urban centres.

Understanding the FBR Rate

When a property is sold in Pakistan, the government uses an official benchmark value set by the FBR to calculate withholding tax, which is a tax collected at the point of the transaction. This FBR rate is separate from both the actual price agreed between buyer and seller and the Deputy Commissioner rate set by provincial governments for stamp duty purposes.

The purpose of periodically revising these benchmarks is to keep them closer to real market values. When official values are too far below what properties actually trade for, the withholding tax collected ends up being lower than it should be, effectively allowing significant portions of high-value transactions to go under-taxed. There are multiple online property tax calculators which help you calculate your property taxes.

Lahore: What the New Rates Say

The Lahore order revises valuations for DHA Phases VI through XIII, all administratively located within Nishtar Town. Rates here are expressed in rupees per marla, the standard unit of land measurement in Punjab.

The most valuable commercial address in the entire Lahore table is the Broadway strip in DHA Phase VIII, the main commercial avenue running through sub-sectors A, B, C and D, officially valued at Rs. 4,988,970 per marla. This figure forms the basis of withholding tax calculations for any commercial plot or shop sold along that stretch.

Among residential areas, DHA Phase XI Rahbar, Sector I carries the highest valuation at Rs. 967,960 per marla, reflecting its established infrastructure and sustained demand. At the lower end, DHA Phase XIII, formerly known as DHA City and located furthest from the city centre, is valued at Rs. 204,960 per marla, consistent with its earlier stage of development.

DHA Phase VI, one of Lahore’s most established residential addresses, is valued at Rs. 1,132,460 per marla for most residential blocks. The C, M and N Blocks carry a lower residential rate of Rs. 761,460 per marla, though their commercial land value rises sharply to Rs. 4,369,410 per marla, reflecting heavy commercial activity in those areas.

A significant addition in this notification is the first-ever official valuation assigned to One Central DHA, a newer development that previously had no FBR benchmark. It has now been entered into the official table at Rs. 760,000 per marla for residential open plots and Rs. 3,100,000 per marla for commercial plots. This means transactions in One Central DHA will now carry a formally calculated withholding tax obligation for the first time.

Across all DHA Lahore entries, built structures, that is, houses or commercial buildings as opposed to bare land, are assessed at a uniform Rs. 1,750 per square foot for residential and Rs. 2,800 per square foot for commercial, regardless of which phase they are located in.

Rawalpindi: A Different Scale, Similar Intent

The Rawalpindi order covers DHA Phases I through V and DHA Valley. An important distinction: unlike Lahore, where rates are expressed per marla, Rawalpindi valuations in this notification are given in rupees per square foot. This reflects a difference in how property is traditionally measured and administered across the two cities.

The highest commercial valuation in Rawalpindi’s table belongs to DHA Phase II, at Rs. 17,677 per square foot for commercial open plots, the single largest figure in the Rawalpindi notification. DHA Phase I follows at Rs. 15,427 per square foot for commercial land.

On the residential side, DHA Phase II again leads at Rs. 2,878 per square foot, while DHA Valley, the most peripheral of the listed localities, sits at just Rs. 466 per square foot for residential open plots. The gap between these two figures illustrates how sharply official land values decline as the distance from the city’s established core increases.

DHA Phases II Extension, III and IV share an identical commercial open plot rate of Rs. 5,946 per square foot, indicating that the FBR considers their commercial potential broadly equivalent. Their residential rates, however, vary: Phase IV at Rs. 1,322 per square foot, Phase III at Rs. 1,011 per square foot and Phase II Extension at Rs. 778 per square foot, differences that broadly reflect each area’s level of development and infrastructure maturity.

Built structure rates across Rawalpindi DHA phases are set at Rs. 1,470 per square foot for commercial and Rs. 735 per square foot for residential in most phases, with DHA Valley’s residential superstructure rate marginally higher at Rs. 770 per square foot.

The Broader Context

Pakistan’s property market has long operated with a well-documented gap between declared transaction values and actual market prices. For years, it was common practice for buyers and sellers to register a property at a fraction of its true value, reducing their tax liability significantly.

FBR valuation revisions are one of the primary tools available to narrow that gap and, with it, improve tax collection from a sector that has historically contributed far less to the national treasury than its scale would suggest.

These revisions also carry relevance beyond individual transactions. Pakistan’s economic reform commitments, including those made under its ongoing programme with the International Monetary Fund, have consistently identified the real estate sector as an area requiring greater documentation and tax compliance. The gradual extension of revised FBR benchmarks to more cities and localities is part of the government’s response to those obligations.

For buyers and sellers in the affected DHA areas, the immediate effect is straightforward: withholding tax at the point of transaction will now be calculated on a revised official value, which in most cases will be closer to actual market prices than the figures it replaces.

Those accustomed to a significant gap between the FBR rate and the market price should account for a narrower margin when planning the financial aspects of a property transaction.

For more news on real estate and Special Reports, visit Chakor Ventures.

References

Federal Board of Revenue, Government of Pakistan. (2026, May 19). S.R.O. 876(I)/2026: Revision of valuation of immovable properties Nishtar Town, Lahore [Statutory notification]. Revenue Division, Islamabad. File No. 2(17)R&S/2017.

Federal Board of Revenue, Government of Pakistan. (2026, May 19). S.R.O. 877(I)/2026: Revision of valuation of immovable properties Rawalpindi [Statutory notification]. Revenue Division, Islamabad. File No. 2(31)R&S/2024.

Akhter, S. (2026, May 19). FBR revises property valuation tables for Nishtar Town Lahore. Pkrevenue.com. https://pkrevenue.com/fbr-revises-property-valuation-tables-for-nishtar-town-lahore/

Government of Pakistan. (2001). Income Tax Ordinance, 2001 (XLIX of 2001), Section 68(4). National Assembly of Pakistan.

Federal Board of Revenue, Government of Pakistan. (2024, October 29). S.R.O. 1722(I)/2024: Valuation of immovable properties Lahore [Statutory notification]. Revenue Division, Islamabad.

Federal Board of Revenue, Government of Pakistan. (2024, October 29). S.R.O. 1728(I)/2024: Valuation of immovable properties Rawalpindi [Statutory notification]. Revenue Division, Islamabad.

CategoriesNews Budget Economy Property Property Taxes Real Estate Real Estate Investment

FPCCI seeks property tax relief to revive real estate, construction sectors

ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed major property tax reforms for the federal budget FY2026-27 to help revive Pakistan’s real estate and construction sectors.

According to FPCCI’s budget proposals, the current tax structure has made property transactions more expensive and slowed investment in the sector. The chamber has suggested reducing withholding tax under Section 236C on the sale of immovable property to a uniform 1% across all transaction values. At present, the rate can go as high as 5.5% on higher-value transactions and is charged on the gross transaction value, regardless of actual profit or loss.

FPCCI also proposed reducing advance tax under Section 236K on property purchases to a flat 1%, while abolishing advance tax on the first property purchase by a filer. The body said simpler and lower tax rates could encourage proper documentation, reduce under-reporting, and improve transparency in the property market.

The chamber further called for abolishing the tax on deemed income under Section 7E, saying it taxes assumed income from immovable property instead of actual earnings. It also recommended withdrawing Section 7F, under which builders and developers are taxed on 10% of gross receipts, regardless of their actual income.

FPCCI said balanced taxation could attract investment and support allied industries such as cement, steel, transport, and labour, helping generate wider economic activity.

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CategoriesNews Budget Economy Investment Tax

IMF Seeks Rs500bn New Taxes, Rs15.264trn FBR Target for FY2026–27

ISLAMABAD: Pakistan is facing mounting pressure from the International Monetary Fund (IMF) to introduce major tax reforms ahead of budget negotiations for fiscal year 2026–27. According to recent reports, the IMF has asked the government to generate nearly Rs500 billion through additional tax measures while setting an ambitious Federal Board of Revenue (FBR) tax collection target of Rs15.264 trillion.

A key part of the IMF’s proposal is the removal of all sales tax exemptions to create a more uniform taxation system. While the standard sales tax rate could be reduced from 22.8 percent to 18 percent, the withdrawal of exemptions is expected to widen the tax net and increase revenue collection. The IMF is also seeking around Rs778 billion through stricter enforcement measures.

The discussions include the expansion of the Third Schedule, which may bring products such as infant formula, dairy items, cooking oil, and other essential goods into a revised tax structure. This move alone is expected to generate around Rs100 billion in revenue.

In another major reform, authorities are considering making digital invoicing mandatory from July 1, 2026. Under the proposal, only digitally issued invoices would be accepted for tax purposes, a step projected to add another Rs100 billion to national revenue while improving transparency in business transactions.

The government is also reviewing a simplified taxation scheme for retailers and shopkeepers with annual turnover between Rs200 million and Rs250 million, potentially linked to electricity bills for easier collection.

Meanwhile, discussions on the controversial super tax suggest that an immediate withdrawal is unlikely, though a phased elimination over the next three years remains under consideration.

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