KP announces no new taxes with major relief for businesses and citizens in budget

PESHAWAR, (APP - UrduPoint / Pakistan Point News - 19th Jun, 2026) The Government of Khyber Pakhtunkhwa on Friday in its annual budget for 2026-27 estimated provincial revenues at Rs182.41 billion for the fiscal year, representing an increase of approximately Rs 50 billion compared to the previous year. According to the announced budget, revenue collection has doubled over the past two years as a result of administrative and fiscal reforms.

Presenting the key features of the revenue budget, the government announced that no new taxes have been imposed in line with its economic vision.

A major relief measure has been proposed for the business community through a reduction in the Infrastructure Development Cess (IDC) from 2 percent to 0.75 percent, lowering the tax burden by more than 62 percent.

Chief Minister Sohail Afridi in his budget speech said, the move would reduce the cost of doing business, encourage investment and strengthen economic activity across the province.

The proposed rate is expected to be the lowest IDC rate in the country, making Khyber Pakhtunkhwa a more attractive destination for trade, industry and investment.

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The budget also proposes a complete exemption from property tax for residential and commercial properties up to five marlas, benefiting nearly 200,000 households.

In another relief measure, the hotel bed tax has been reduced from 7 percent to 5 percent.

The government has abolished professional tax for individuals earning the minimum monthly income and has also granted a permanent exemption to government employees in Basic Pay Scales (BPS) 1 to 6.

Furthermore, a 30 percent waiver on outstanding tax liabilities has been announced for industrial buildings.

The provincial government has also maintained its tax relief policy for the merged districts of former FATA and PATA, confirming that no new taxes will be imposed in these areas during the fiscal year 2026–27.

The relief package is expected to boost business confidence, help resolve pending tax disputes and pave the way for sustainable economic growth in the province.