FBR releases new withholding tax rates for 2026-2027

The Federal Board of Revenue has released updated FBR withholding tax rates for the new financial year. The withholding tax rate card covers a wide range of payments and transactions across Pakistan.

The updated FBR tax rates 2026-27 have been prepared following changes introduced through the Finance Act 2026. The document provides details of Pakistan tax rates for salaries, imports, profits, exports, services, rent, property and other transactions.

Salary Tax Rates

Under the new withholding income tax structure, people earning up to Rs600,000 in taxable income annually will pay no salary tax.

For income above Rs600,000 and up to Rs1.2 million, a 1% tax will apply to the amount exceeding Rs600,000.

Higher income brackets will face progressively higher rates. Income above Rs7 million will be taxed at Rs1.424 million plus 35% of the amount exceeding Rs7 million.

The FBR tax rate card also provides separate rates for different types of payments and income sources.

Tax Rates for Business and Services

The FBR withholding tax schedule includes different rates for IT services, professional services, imports and payments to non-residents.

For IT and IT-related services, ATL taxpayers will face a 4% rate, while non-ATL taxpayers will face 8%.

The withholding tax rate card also includes separate rates for goods, services and contracts.

According to the updated FBR tax rates 2026-27, profits paid by banks and financial institutions can also attract different rates depending on the taxpayer’s ATL status.

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Social media and E-Commerce

The updated Pakistan tax rates also affect digital creators and influencers.

Social media earnings are subject to a 5% withholding tax for ATL taxpayers and 10% for non-ATL taxpayers.

This means withholding income tax will continue to affect social media earnings, particularly for people who are not included on the Active Taxpayers List.

For e-commerce payments made digitally or through banking channels, the rate is 1% for ATL taxpayers and 2% for non-ATL taxpayers. Cash-on-delivery transactions carry rates of 2% and 4%.

Property, Vehicles and Utility

The FBR tax rate card also lists rates for property transfers, vehicles, electricity, telephone and internet services.

Property transfers carry a 2.75% rate for ATL taxpayers and 11.50% for non-ATL taxpayers.

Vehicle rates depend on engine capacity. Cars up to 850cc face rates of 0.50% for ATL taxpayers and 1.50% for non-ATL taxpayers. Vehicles above 3,000cc face rates of 12% and 36%.

The FBR withholding tax schedule also covers electricity and telecommunications.

What tax payers should know

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The updated Pakistan tax rates also show why taxpayers should check their ATL status before making payments or filing transactions.

The withholding income tax rates can vary depending on the nature of income and the taxpayer’s status.