PESHAWAR: The Khyber Pakhtunkhwa (KP) government has proposed significant tax relief measures for low-income employees, industrial units, and owners of small residential and commercial properties in its budget for the fiscal year 2026-27.
Presenting the budget, Chief Minister Muhammad Suhail Afridi announced that the provincial government has not introduced any new taxes in the upcoming fiscal year. Instead, the budget focuses on reducing the tax burden on citizens and businesses.
Among the key proposals is a complete exemption from property tax for residential and commercial properties measuring up to five marlas. The government has also proposed reducing the Infrastructure Development Cess from 2 percent to 0.75 percent.
In another relief measure, the hotel bed tax is proposed to be reduced from 7 percent to 5 percent. The budget further recommends abolishing professional tax for individuals earning the minimum monthly income and exempting government employees in Grades 1 to 6 from the tax.
To support industrial growth, the provincial government has proposed a 30 percent waiver on outstanding tax liabilities related to industrial buildings.
The KP government also announced that it will continue its tax relief policy for the former Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA). No new taxes have been imposed on these regions for the next fiscal year.
The proposed measures are aimed at providing economic relief to low-income groups, encouraging industrial activity, and supporting small property owners across the province.
