Committee Proposes Mobile Tax Relief, Extends Airline Exemptions in Finance Bill

ISLAMABAD – A parliamentary committee has finalised its recommendations for the Finance Bill 2026, proposing tax relief for low-end mobile phone users, extending tax exemptions to all airlines, and approving heavy duties on luxury and high-end electric vehicles.

The National Assembly Standing Committee on Finance, chaired by MNA Naveed Qamar, concluded its clause-by-clause review of the bill. During the review, lawmakers questioned the government’s mobile phone taxation policy, which generates Rs37 billion annually, with Apple devices alone contributing Rs21 billion. The FBR Chairman assured the committee he would review the possibility of reducing the 20% regulatory duty on imported phones valued up to $200. Lawmakers also proposed an instalment-based system for paying mobile phone taxes, directing the FBR and PTA to develop a workable plan.

Significant changes were also proposed for the auto sector. The committee approved proposals to reduce duties and taxes on vehicles up to 1800cc to make them cheaper, while simultaneously approving heavy taxes on imported luxury, hybrid, and electric vehicles. A special excise duty of 86% was proposed for imported cars between 2000cc and 3000cc, and 92% for those above 3000cc. For electric vehicles, a 30% customs duty was proposed for models up to $75,000 and 40% for those over $110,000, though EVs up to $75,000 will remain exempt from federal excise duty.

In the aviation sector, the committee decided to extend an 18% sales tax exemption on aircraft leases and the procurement of spare parts to all airlines, not just the national carrier. Members argued that the relief should be sector-wide to ensure fair competition and a level playing field. They also insisted that the financial relief granted to airlines should be reflected in lower ticket prices for consumers.