Buying, selling of immovable properties: WHT rates to be decreased from July 1

ISLAMABAD: Finance Bill 2026 will announce massive decrease in withholding tax rates on buying and selling of immovable properties from July 1, 2026.

The announcement for the real estate sector would be made by Finance Minister during budget speech today (Friday).

The proposal has been cleared from International Monetary Fund (IMF), Prime Minister office and Ministry of Finance, top officials added.

Sources told Business Recorder that the exporters’ emergency package to be announced in budget (2026-27) may include tax incentives including restoration of Export Facilitation Scheme (EFS) into its original form, change of Normal Tax Regime (NTR) to Final Tax Regime (FTR) and resolving Duty Drawback on Local Taxes and Levies (DLTL) related issues of exporters.

READ MORE: Property deals: Cut in WHT rates being negotiated with IMF, FBR tells NA panel

The overall incidence of taxes would be reduced on exporters to deal with the exporters emergency declaration “in budget, which are also subject to over 45 percent additional taxes. Industry has proposed that the EFS as a program has been instrumental in increasing the exports of the country and making the products of Pakistan more competitive in terms of quality and pricing.

The removal of EFS on yarn and fabric has had very little effect on the quantity of import of yarn and fabric however it has affected the liquidity of the exporters hurting him from investing further into his business.

The industry suggested reinstatement of the EFS in its original form with added checks and balances so no misuse can occur and making sure that the non exporting manufacturers are not hurt by any misuses.

One percent tax on exports may likely be abolished in coming budget (2026-27) under a proposed package for exporters to be announced in the budget speech, highly placed tax officials said.

The Finance Act 2024 shifted exporters from the Final Tax Regime (FTR) to the Normal Tax Regime (NTR), replacing the one percent turnover tax with a minimum 2 percent tax on export proceeds- one percent minimum tax and one percent advance tax, deducted upon realization electronically at source.

The industry has proposed to reinstate the Final Tax Regime (FTR) as optional with a one percent turnover tax, ensure timely sales tax refunds, and provide tax relief for exporters facing losses with a transparent mechanism. The exporters who wish to remain in NTR should be protected from any undue harassment from FBR by forming a special committee to protect their rights.

Copyright Business Recorder, 2026