Pakistan’s federal budget for FY2026-27 brings a mixed bag for consumers, with taxes raised on large vehicles, cigarettes, fertilisers, and pesticides, while relief has been extended to air travellers, property buyers, and the solar energy sector.

Costlier

Owners of vehicles above 2,000cc will face higher taxes, pushing prices up further in the large car segment. Duties on electronic cigarettes and liquids have also been increased. Fertilisers and pesticides will become more expensive following new levies.

In a significant new measure, income earned through social media will attract a 5% tax — a move that brings digital content creators into the tax net for the first time.

Cheaper or relieved

Solar panels will see no price increase, with the government maintaining existing exemptions for the sector.

Air tickets are expected to become cheaper, with online ticket purchases set to attract lower taxes.

Cosmetics and beauty products are also expected to see a price reduction.

Property transactions are likely to pick up following relief measures in the budget.

Withholding tax on property transfers for filers has been halved from 2.5% to 1.25%, while capital value tax on foreign assets has been abolished entirely.