The government has also proposed a major reduction in Federal Excise Duty (FED) on business-class tickets for international travel.
The measure is being considered as a tax policy relaxation to support the air travel sector and encourage the purchase of international tickets from Pakistan.
According to FBR officials, the proposed reduction will provide relief to airlines and the travel industry and help boost Pakistan’s aviation market.
Proposed FED cuts
For business-class travel to the United States, FED is proposed to be reduced from Rs350,000 to Rs50,000. For tickets to the Middle East and Africa, FED is proposed to be cut from Rs105,000 to Rs25,000.
Also Read: Luxury cars face up to 40% tax in budget
For passengers traveling to Europe, FED is proposed to be reduced from Rs210,000 to Rs40,000. For the Far East and Australia, FED is also proposed to be reduced from Rs210,000 to Rs40,000.
Federal budget size fixed at Rs18.77tr
According to the budget document, the size of the federal budget for the upcoming fiscal year has been set at Rs18,771 billion. The Federal Board of Revenue’s annual tax target has been fixed at Rs15,264 billion.
Gross revenue has been estimated at Rs20,600 billion, while non-tax revenue is projected at Rs5,336 billion.
The budget document shows that Rs8,848 billion will be transferred to the provinces in the next fiscal year. After provincial transfers, the federal government’s net revenue is estimated at Rs11,751 billion.
Also Read: Govt imposes Rs150bn new taxes in budget 2026-27
The government plans to borrow Rs2,034 billion from internal sources and Rs813 billion from external sources. It will also obtain Rs4,012 billion through T-bills, Pakistan Investment Bonds and Sukuk.
In addition, Rs161 billion is expected to be generated through the privatization of government institutions during the next fiscal year.
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