The federal government has proposed an increase in the minimum tax rate on locally manufactured mobile phones and several other sectors in the budget for the fiscal year 2026-27, according to reports today.
According to the details, the proposed changes apply to distributors, dealers, sub dealers and wholesalers of packaged goods, fertilizer, sugar, locally produced mobile phones and electronics.
Under the Finance Bill 2026, the minimum tax rate under Section 113(1) is proposed to be raised from 0.25 per cent to 0.5 per cent.
The Finance Bill also includes several amendments to Part II of the Second Schedule of the Income Tax Ordinance.
Under the proposed changes, the tax rate on terminal operators under Section 153(1)(b) is set to be reduced from 15 per cent to 12 per cent of the gross payment amount.
The bill further proposes that the tax deducted from payments received by manufacturers of iron and steel products on the sale of their goods should be treated as a minimum tax. At present, this tax is adjustable, according to the reports.
In addition to this, the government has proposed ending the withholding tax exemption available to companies operating trading houses under Section 153.
The Finance Bill 2026 also proposes the removal of tax rates currently applicable to late filers on the sale, transfer and purchase of immovable property.
IT ministry proposes reduction in mobile taxes
Previously, the Ministry of Information Technology (IT) proposed to reduce advance tax and general sales tax on mobile phone users for the budget 2026-27.
The purpose of the proposal is to support the telecom sector and give relief to the public. The proposal has been sent to the Ministry of Finance.
Officials from the IT Ministry said that the government should reduce the current 15 per cent advance tax and 19.5 per cent GST in a phased manner.
