Pakistan

Major developments in the tax laws through Finance Act, 2026 relating to the corporate sector are summarised as follows:

• Super tax has been abolished for persons with taxable income not exceeding PKR 500 million, except for certain specified persons, and the general rate of super tax rate has been reduced from 10% to 8%. Moreover, Super tax shall not applicable to the person where export proceeds exceed 80% of its total turnover (please see the Taxes on corporate income section for details).

• A 10% tax credit has been introduced for businesses required to integrate with the Federal Board of Revenue (FBR) real-time production monitoring or sales reporting systems (please see the Tax credits and incentives section for details). Moreover, the disallowing of expense due to non-integration with the FBR has been reduced from 8% to 3% of the total expenditure claimed (please see the Deductions section for details).

• The export tax regime has been rationalised by replacing the earlier 1% withholding tax and separate 1% advance tax with a single 1.25% minimum tax. The rate for indirect exporters has also been increased from 1% to 1.25% (please see the Taxes on corporate income section for details).
• The sunset period for the concessionary 0.25% tax rate available to exporters of IT and IT-enabled services has been extended from tax year 2026 to tax year 2029 (please see the Taxes on corporate income section for details).
• Persons having turnover not exceeding PKR 200 million, who would otherwise be subject to the final tax regime on payments for digitally ordered goods and services, may elect to opt out of the final tax regime by furnishing an irrevocable certificate to the Commissioner of Inland Revenue (please see the Taxes on corporate income section for details).

• The withholding tax rate applicable to capital gains arising from the disposal of debt securities (other than securities settled through the National Clearing Company of Pakistan Limited (NCCPL) via a registered stock exchange) has been increased from 15% to 20%.

• The tax exemption for Private Equity Funds and Venture Capital Funds has been made available where they distribute at least 90% of their accounting income (please see the Tax credits and incentives section for details).
• The Federal Government may reduce the rate of any of the withholding taxes in the nature of minimum tax rates by 1% (other than minimum tax on turnover under section 113) on the basis of economic viability in cases of a person or class of persons subject to such restrictions and limitations as the Federal Government may specify (please see the Taxes on corporate income section for details).

• Tax concessions and incentives for investments through foreign currency value accounts and non-resident rupee value accounts, previously available only to non-resident individuals, have been extended to non-resident AOPs and corporate investors (please see the Income determination and Tax credits and incentives section for details).

• Algorithmic settlement, faceless tax administration, an Independent Case Scrutiny Committee, and enhanced financial-data reporting through banking channels have been introduced to strengthen data-driven tax administration (please see the Tax administration section for details).