Federal Board of Revenue (FBR)

Pakistan and Iran have established trade routes under a 2008 agreement to boost connectivity, with recent FBR procedures facilitating Iran-bound cargo at Pakistani ports. Strategic considerations, including Afghanistan's instability and Central Asia access, drive Pakistan's growing economic engagement with Iran.

A parliamentary committee in Pakistan questioned the government's mobile phone taxation policy and proposed taxes on high-end electric vehicles. The committee finalized recommendations for the Finance Bill 2026, highlighting a tiered tax structure for imported mobile phones and revenue figures from Apple devices. Tax relief for airlines was extended beyond Pakistan International Airlines, but lawmakers raised concerns about consumer relief and potential revenue shortfalls.

Pakistan's Finance Minister Muhammad Aurangzeb presented a budget aiming to balance relief, growth, and fiscal consolidation, but it faces challenges in revenue collection and tax reform. The government claims a shift from stabilization to growth, yet reliance on untested mechanisms for tax collection and unresolved structural issues like low tax-to-GDP ratios remain critical risks.

The FY27 budget in Pakistan signals a shift from stabilization to moderate growth through tax cuts, real estate stimulus, and export incentives. However, concerns arise about sustainability due to reliance on historically unstable real estate and fiscal challenges like revenue shortfalls and provincial funding pressures.

The government introduced budget measures addressing public concerns by scrapping deemed income on capital assets, abolishing the Super Tax for firms with income up to Rs500 million, and reducing real estate transaction taxes. New revenue strategies include taxing digital content creators, expanding sales tax, and implementing 'faceless' tax administration to enhance compliance.

Pakistan's government reported a 3.37% decline in tax exemptions to Rs2.353 trillion in FY26, the first reduction in seven years, despite initial high figures and revisions. The decline follows seven consecutive years of increases and comes amid revenue shortfalls, with exemptions impacting federal-provincial revenue sharing.

The Pakistani government introduced the 'Fixed Tax Asaan Scheme' to simplify tax compliance for small traders with annual turnover up to Rs200 million. The scheme allows a 1% tax rate via a simple form, offers exemptions from audits and POS requirements, and imposes fines on non-participants. It replaces the failed Tajir Dost Scheme and includes optional participation for traders.