Key highlights of Pakistan budget for FY2026-27

Pakistan government unveiled on Friday Rs18.771 trillion budget for the fiscal year 2026-27, targeting a GDP growth target of 4%.

As the federal budget takes center stage in the country’s economic calendar, it sets the tone for fiscal priorities, policy direction, and economic expectations for the year ahead.

From taxation measures and development spending to inflation management and growth targets, this budget brief offers a snapshot of how the government plans to balance competing demands in a challenging macroeconomic environment during FY27:

• Total outlay at Rs18.77 trillion, up 7% as compared to Rs17.57 trillion budgeted outlay of FY26
• Growth target at 4%
• Inflation expected at 8.2%
• FBR revenue target at Rs15.26 trillion, an increase of over 8% compared to Rs14.13 trillion proposed in outgoing fiscal year
• Rs5.336 trillion from non-tax revenue
• Rs1 trillion for Public Sector Development Programme (PSDP)
• Minimum wage at Rs40,700, 10% increase from Rs37,000 in FY26
• Rs8.054 trillion for interest payments, up 16% from Rs6.937 trillion in FY26 (revised)
• Rs1.169 trillion for pension payments, up 11% from Rs1.055 trillion in FY26
• 7% increase in government employees and pensions
• Rs3 trillion for defence affairs and services, up 15.6% from Rs2.6 trillion (revised) in FY26
• Export development surcharge of 0.25% on export income abolished
• Fiscal budget deficit at 3.6% of GDP
• Primary surplus of 2% of GDP
• Rs71 billion for Prime Minister Apna Ghar Programme
• Rs838 billion for Benazir Income Support Programme (BISP)
• Rs25.1 billion for health projects under federal development programme for FY2026-27
• Rs46 billion for education under federal development programme for FY2026-27
• Rs13 billion for governance
• Surcharge on salaried class abolished
• 2% reduction in Super Tax for income exceeding Rs500 million, except for Banks, Fertilizer and E&Ps
• WHT on property purchases reduced from 2.5% to 1.25% and on sales from 5.5% to 2.75%
• WHT on Int. transaction by credit & debit reduced from 5% to 0.5%
• Advance income tax and minimum tax on exports reduced from 2.0% to 1.25%
• Fixed tax Asaan scheme for retailers with earning up to Rs200 million. Retailers to pay minimum Rs25,000 per annual or 1% of sales
• SUVs (2,000–3,000cc) be subject to FED.
• FED of Rs80/litre introduced on petroleum-based solvents, naphtha, and turpentine oil, which were previously exempt from excise duty
• FED on e-liquids for e-cigarettes raised from Rs10,000 to Rs16,500 per kg, with removal of 65% retail price cap
• Minimum tax rate for distributors and wholesalers increased from 0.25% to 0.5%

Income tax reduction:

• 23% to 20%: Between PKR 2.2mn-3.2mn
• 30% to 25%: PKR 3.2mn- 4.1mn
• 35% to 29%: PKR 4.1mn- PKR 5.6mn
• 35% to 32%: PKR 5.6mn- PKR 7.0mn
• 0%: Surcharge Abolished for above PKR 12mn