Peshawar: The proposed Khyber Pakhtunkhwa Finance Bill 2026 has outlined a series of tax reforms, revised fee structures, and revenue-generating measures aimed at strengthening the province’s financial resources. According to the draft bill, the new fiscal measures will come into effect from July 1, 2026, if approved by the provincial assembly.
One of the key proposals offers relief to residential property owners. The bill suggests a 30 percent discount on outstanding property tax dues accumulated up to June 30, 2026, provided that the full payment is made by December 31, 2026. The measure is intended to encourage tax compliance and improve revenue collection.
The hospitality sector is also expected to face revised taxation under the proposed legislation. Hotels connected to the Point of Sale (POS) system would be subject to a 5 percent tax on room rentals, while hotels not integrated with the system could face a higher tax rate of 10 percent.
In an effort to support low-income individuals, the bill proposes an exemption from professional tax for people earning up to the minimum wage. At the same time, new tax slabs have been suggested for higher-income groups. Individuals earning more than Rs300,000 per month may be required to pay an annual professional tax of Rs5,500.
The proposed finance bill also introduces updated professional tax rates for government employees, private educational institutions, hospitals, companies, jewelers, departmental stores, petrol pumps, and several other business categories operating within the province.
According to the draft, private schools charging monthly fees above Rs5,000, as well as private medical, engineering, and law colleges, could be subject to an annual tax of Rs100,000. The same annual tax rate has been proposed for private hospitals employing more than 50 staff members.
