ISLAMABAD – The federal finance minister unveiled key proposals and figures in federal budget, announcing tax relief measures, continued subsidies, and significant allocations for debt servicing, defence, and pensions.
The country’s finance czar proposed abolishing Federal Excise Duty on foreign travel in business class. He also confirmed that the concessionary tax regime for electric vehicles, including motorcycles, rickshaws, cars, and buses, will remain in place to promote cleaner transportation.
Customs duty has been removed on more than 100 raw materials used in medicines for cancer and other serious diseases. The government has also proposed a reduced 1% sales tax on imported electric trucks, aimed at supporting green logistics and electric mobility.
According to official budget documents, the total size of the federal budget has been estimated at Rs 18,771 billion. The largest share of expenditure is allocated to debt servicing, with Rs 8,054 billion earmarked for interest payments alone.
Pension spending is projected at Rs 1,169 billion, including Rs 822 billion for military pensions, Rs 272 billion for civil pensions. Defence expenditure has been set at Rs 3,000 billion, while subsidies are estimated at Rs 1,091 billion. Civil government operations are expected to cost Rs 1,071 billion, and Rs 430 billion has been reserved for emergency-related spending.
Overall current expenditures are projected at Rs 17,495 billion. The federal development budget has been set at Rs 1,050 billion, while the Federal Board of Revenue (FBR) has been given a tax collection target of Rs 15,264 billion.
No More Sales Tax on Pads, Tampons and Condoms after Budget 2026–27
