- ISLAMABAD- Federal Finance Minister Muhammad Aurangzeb presented the Rs17,573 billion budget for the fiscal year 2025-26 in the National Assembly on Tuesday.
Budget 2025-26
Economic Indicators
- GDP Growth: 2.7% in 2025
- Inflation: Dipped from 29% to 4.5%
- Interest Rate: Cut from 22% to 11%
- SOE Losses: Rs800 billion
- Debt-to-GDP Ratio: Improved from 68% to 65%
With stern changes, the government eyed massive tax collection target of Rs14.13 trillion. With total income projected at Rs19.4 trillion, the government is rolling out new taxes on digital economy, agricultural income, and previously untaxed sectors.
Salary Increment
In a major relief move, the government planned 30pc allowance increase for employees in Grades 1 to 16, along with the merger of ad hoc allowances into their basic pay. Pensioners will receive an increase of 5% to 7.5%, offering support amid inflationary pressures.
Tax Proposals
The budget includes tax proposals aligned with IMF guidelines, such as levies on fertilizers, pesticides, and bakery items. Freelancers and social media earners are also expected to come under the tax net. Taxation on agriculture, a politically sensitive issue, will be addressed through a new structured plan.
The government is planning to abolish federal excise duty on property transactions while imposing taxes in the erstwhile FATA regions. Regulatory duties on over 3,500 imported items may be lowered, with customs duties on industrial raw materials expected to drop by 2–3% to support local production.
The super tax on high-income companies is set to be gradually reduced, and tax rates on construction materials may be eased to stimulate the real estate sector.
Defense Expenditure
Pakistan aims to boost exports to $44.9 billion in FY25, with imports projected at $65.2 billion. Remittances are expected to climb to $39.4 billion. Defense spending will increase by 18%, reflecting growing national security demands.
Key Highlights from Economic Survey 2024–25
| Category | Details |
| Tax Exemptions | Rs5.84 trillion granted in FY24, up Rs1.96 trillion from previous year;
Sales tax exemptions Rs4.25 trillion |
| Debt | Total public debt Rs69.2 trillion
Debt-to-GDP ratio moved down from 68% to 65% |
| IT & Telecom | IT exports $2.83 billion
Freelancers contributed $400 million Telecom revenue Rs803 billion |
| Energy | Petroleum use up 12.5% despite lower oil prices
Oil import bill $8.4 billion |
