Pakistan’s 2026‑27 federal budget trims key taxes, easing travel costs and property fees for overseas Pakistanis, including those living in the UAE. The changes target business‑class airfare and advance tax on real‑estate deals, offering immediate savings.
Business class travel tax cut
The government cut Federal Excise Duty on business‑class routes to the UAE and the wider GCC from Rs105,000 (about Dh1,385) to Rs25,000 (about Dh330). Similar reductions apply to other regions: Rs350,000 to Rs50,000 for the Americas, Rs210,000 to Rs40,000 for Europe, and Rs210,000 to Rs40,000 for the Far East, Australia, New Zealand and the Pacific.
Tax partner Zeeshan Ijaz Qureshi explained that the lower duty “offers a direct financial benefit to overseas Pakistanis.” He added that frequent travellers, especially those commuting between Pakistan and other countries, will see noticeably lower travel costs. “The substantial reduction in Federal Excise Duty on international business class travel offers a direct financial benefit to overseas Pakistanis.” — Zeeshan Ijaz Qureshi, Tax Partner, KPMG Pakistan
Airfares have risen in recent months because of higher jet fuel prices after the Middle East war and the temporary closure of the Strait of Hormuz. The tax cut is expected to offset part of that increase, making trips to the UAE and other Gulf states more affordable for the diaspora.
Property transaction tax reforms
Advance tax rates on property transactions under Sections 236C and 236K have been reduced to flat rates of 2.75 % and 1.5 % respectively, down from previous ranges of 4.5‑5.5 % and 1.5‑2.5 %. The move aims to encourage documentation and streamline real‑estate transactions.
Syed Asif Zaman, partner at Alif Advisory and Management Services, said the lower rates “make real estate investments more attractive” for overseas Pakistanis who own property or earn rental income in Pakistan. “Reduced property‑related taxes for tax filers make real estate investments more attractive.” — Syed Asif Zaman, Partner, Alif Advisory and Management Services
Investors are advised to keep their Active Taxpayer List (ATL) status to avoid additional scrutiny. The government’s emphasis on formal banking channels for remittances complements the tax relief, reinforcing a supportive environment for the Pakistani diaspora’s financial activities.
Frequently asked questions
What is the new Federal Excise Duty for business‑class flights from Pakistan to the UAE?The budget cuts the duty from Rs105,000 (about Dh1,385) to Rs25,000 (about Dh330) for business‑class routes to the UAE.
How much will overseas Pakistanis save on business‑class travel to the GCC after the budget change?The duty for GCC routes drops to Rs25,000 (≈Dh330) from Rs105,000 (≈Dh1,385), giving a direct financial benefit to overseas Pakistanis.
What are the new advance tax rates for property transactions in Pakistan?Advance tax is now a flat 2.75 % under Section 236C and 1.5 % under Section 236K, reduced from previous ranges of 4.5‑5.5 % and 1.5‑2.5 % respectively.
Who said the tax cuts will benefit overseas Pakistanis?KPMG Pakistan tax partner Zeeshan Ijaz Qureshi and Alif Advisory partner Syed Asif Zaman both said the cuts will directly benefit overseas Pakistanis.
When will the travel tax reductions for business‑class flights take effect?The reductions are part of the 2026‑27 federal budget.
