ISLAMABAD (Web Desk ) – The federal government is expected to retain existing tax rates on solar panels, stationery items and the stock market in the upcoming fiscal budget 2026-27, offering continuity in key sectors amid ongoing budget deliberations.
According to sources familiar with the budget proposals, authorities have withdrawn the plan to increase sales tax on solar panels from 10 per cent to 18 per cent. The proposed hike had raised concerns among consumers and industry stakeholders who feared it would discourage the adoption of renewable energy solutions at a time when demand for alternative power sources continues to grow.
The government has also decided against increasing sales tax on stationery items. The move is likely to provide relief to students, educational institutions and small businesses that rely heavily on such products and had expressed concern over potential price increases.
Similarly, investors are expected to see stability in the capital market, as no changes are being proposed to the existing tax structure governing the stock market from July 1, 2026.
While maintaining the current tax regime in these areas, policymakers are reportedly considering relief measures for salaried individuals. Sources indicated that the highest income tax slab threshold for salaried taxpayers could be revised upward, potentially reducing the tax burden on middle- and upper-income earners. Additional surcharges and penalties imposed on high-income taxpayers are also under review and may be withdrawn.
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The export sector could also receive incentives aimed at improving competitiveness and easing financial pressures. Among the proposals under consideration is the abolition of the existing one per cent export tax. Officials said further incentives for exporters may be unveiled during the budget speech.
The issue has gained importance following changes introduced under the Finance Act 2024, which shifted exporters from the Final Tax Regime (FTR) to the Normal Tax Regime (NTR). Under the revised framework, exporters became subject to a minimum two per cent tax on export earnings, comprising one per cent minimum tax and one per cent advance tax.
Industry representatives and export stakeholders have urged the government to restore the Final Tax Regime on an optional basis with a one per cent turnover tax. They have also called for timely processing of tax refunds, relief for loss-making exporters and safeguards against unnecessary actions by the Federal Board of Revenue (FBR) through the establishment of an independent oversight mechanism.
