Punjab Finance Act, 2026 increases the concessionary sales tax rate for consultants and rent-a-car services from 5% to 8% without input tax adjustment.

LAHORE: The Punjab government has increased the concessionary sales tax rate on consultancy services to 8 per cent under the Punjab Finance Act, 2026, raising the rate from 5 per cent for the fiscal year 2026-27.

The revised rate applies to specified professional services provided without the facility of input tax adjustment and forms part of the provincial government’s revenue measures for the new financial year.

Consultancy services taxed at 8%

Under the amended law, an 8 per cent sales tax will apply, without input tax adjustment, to services relating to accountancy, auditing, taxation and corporate law consultancy.

The revised rate covers services provided by:

• Accountants, including practising chartered accountants and cost accountants;

• Auditors;

• Actuaries;

• Tax consultants, by whatever name called;

• Practising company secretaries;

• Receivers;

• Liquidators;

• Auctioneers; and

• Corporate law consultants.

The concessionary rate is available on the condition that input tax adjustment is not claimed.

Previously, these professional services were subject to a 5 per cent sales tax under the same conditions.

Higher tax on rent-a-car services

The Punjab Finance Act, 2026 has also increased the concessionary sales tax rate on rent-a-car services, including the rental of all categories of vehicles used for the transportation of persons.

The applicable rate has been raised from 5 per cent to 8 per cent, provided the services are supplied to end consumers and the service provider does not claim input tax adjustment.

Revenue and compliance objectives

The increase in concessionary tax rates forms part of the Punjab government’s broader fiscal strategy to enhance provincial revenue while maintaining simplified taxation regimes for selected service sectors.

Tax experts said the revised rates will increase the tax burden on consultants and vehicle rental businesses operating under the concessionary regime. However, they noted that businesses may continue to benefit from simplified compliance by opting for the reduced-rate structure without claiming input tax credits.

They advised service providers to review their invoicing systems, pricing policies and tax compliance procedures to ensure the correct application of the new rates from the start of FY2026-27.