Pakistan government presented the budget for the fiscal year 2025-26 on Tuesday, targeting a modest 4.2% growth for FY26, compared to 2.7% expected in the outgoing FY25.
Business Recorder takes a look at some of the key highlights of the documents.
-
Growth targeted at 4.2% in FY26
-
Total outlay targeted at Rs17.6 trillion, down 7% or Rs1.3 trillion as compared to Rs18.9 trillion budgeted outlay of FY26
-
Inflation expected at 7.5% in coming fiscal year
-
Budget deficit proposed at 3.9% and primary surplus at 2.4% of gross domestic product (GDP)
-
FBR revenue projected at Rs14.13 trillion, up 18.7% from outgoing fiscal year
-
Federal non-tax revenue projected at Rs5.15 trillion
-
Rs1 trillion allocated for Public Sector Development Programme (PSDP)
-
Interest expense of Rs8.207 trillion for FY26 projected, down 8% YoY from FY25 level of Rs8.9 trillion
-
Agriculture, industrial and services expected to post growth of 4.5%, 4.3% and 4%, respectively in FY26
-
Rs2.55 trillion for defence spending
-
Rs1.05 trillion for pensions
-
Rs1.19 trillion for subsidies in energy and other sectors
-
Rs716 billion for Benazir Income Support Programme (BISP), up by 21%
-
Rs39.5 billion allocated for Higher Education Commission
-
Rs4.8 billion for science and technology
-
Super tax rates under section 4C proposed to be reduced by half a percentage point for income slabs between Rs200 million to Rs500 million against each slab respectively
-
Govt removed FED of 7% and reduced Advance Tax by 150bps on immovable property
-
No change in capital gain or dividend tax on stocks
-
No change in FED on Fertilizer and Pesticide
-
Govt proposed to bring down existing 5% slab to applicable on income between Rs60k-120k per month to 1%. While in subsequent 2 slabs rates (ppts) have reduced from 15% to 11%, and from 25% to 23%. The surcharge was reduced from 10% to 9%.
-
18% tax proposed on solar panels
-
Reduced rate of 12.5% on autos below 850cc removed. Normal tax of 18% likely to be applied
-
Carbon tax of Rs2.5/liter imposed on petrol, diesel and furnace oil for FY26
Comments