Key highlights of Pakistan budget for 2025-26
- Business Recorder takes a look at key points
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