ISLAMABAD: The budget session is underway in the National Assembly where Federal Finance Minister Muhammad Aurangzeb is presenting a federal budget of more than Rs 18,000 billion.
In his speech, the Federal Finance Minister said that I am grateful to the coalition parties, it is an honor for me to present the government’s third budget.
The Finance Minister said that the victory in Benin Marsus is a bright chapter, last year India was given a befitting reply, today the whole world recognizes Pakistan’s defense power, many countries want to include our fighter jets in their forces.
Muhammad Aurangzeb said that I would like to mention the defense agreement between Pakistan and Saudi Arabia, we have a sacred and heavy responsibility, the brotherly relationship with Saudi Arabia was strengthened by the defense agreement.
The Federal Finance Minister said that in this fiscal year, the growth rate of large-scale manufacturing was 6.1 percent, the growth rate in the services sector was 4.1 percent, the size of our economy has reached $452 billion, which is a new milestone, while per capita income has increased from $1,751 to $1,901.
According to the budget document, the total size of the federal budget will be Rs18,771 billion, with an allocation of Rs8,054 billion for interest payments and a total expenditure of Rs1,169 billion on pensions, of which Rs822 billion is estimated to be spent on military pensions and Rs272 billion on civil pensions.
An allocation of Rs3,000 billion is estimated for defense, while an allocation of Rs1,091 billion is estimated to be allocated for subsidies.
According to the budget document, the expenditure on the civil government is estimated to be Rs 1071 billion, while Rs 430 billion is estimated to be allocated to deal with the emergency situation, bringing the total ongoing expenditure to Rs 17,495 billion.
According to the budget document, the size of the federal development budget will be Rs 1050 billion, while the FBR’s tax collection target is estimated to be Rs 15,264 billion.
7% increase in salaries and pensions
Salaries and pensions of government employees have been increased by 7%.
Relief in super tax
In a meeting chaired by Speaker National Assembly Ayaz Sadiq, the Finance Minister said that it is a matter of pride for me that I am going to present the third budget. I am grateful to Prime Minister Shahbaz Sharif and Bilawal Bhutto in preparing the budget. Pakistani forces gave a full and befitting reply to Indian aggression. The success of Banyan Marsus is a chapter in our history. I am proud of the great success of Banyan Marsus.
He said that strong defense can help in becoming an economic power. Today, Pakistan’s image is such that its voice is heard all over the world. Strong defense is important for our economic development. The strategic agreement between Pakistan and Saudi Arabia is important. Today, the world recognizes Pakistan’s defense strength. Strong defense is important for our integrity and is also important for economic development.
Apna Ghar Scheme
In the coming financial year, an amount of Rs 71 billion has been allocated for the Prime Minister’s Apna Ghar Scheme.
Increase in minimum wage
In the budget 2026-27, the minimum wage of a worker has been increased by 10 percent. The minimum monthly wage of a worker has been increased by Rs 3,000 to Rs 4,000.
Tax relief for salaried class
The federal government has announced relief in 4 slabs of income tax for the salaried class in the budget 2026-27.
In the next financial year, the income tax rate on annual salary of Rs 22 to 32 lakh is being reduced from 23 to 20 percent, while the tax rate on annual salary of Rs 32 to 41 lakh is being reduced from 30 to 25 percent.
Vehicles, Motorcycles, Rickshaws
The current concession on electric motorcycles, rickshaws, vehicles, buses remains in effect. The sales tax rate on imported electric trucks will be reduced by one percent.
FED has been imposed on all petrol and diesel vehicles from 2,000 to 3,000 cc, while duty has been increased on vehicles above 3,000 cc. FED will also be applicable on electric vehicles worth more than 20 million.
Tax reduced for filers on property purchase
The tax for filers on property purchase has been reduced from 2.5 to 1.25 percent. Federal Finance Minister Muhammad Aurangzeb said while presenting the budget in the National Assembly that the tax for filers on property sale has been reduced from 5.5 to 2.75 percent.
He said that the super tax on income from 150 million to 250 million has been completely abolished.
In addition, the advance income tax rate on exports has been reduced from 2 to 1.2 percent, and it has been announced that the FTR concession on IT export income will continue until June 2029.
Defense budget
The federal government has allocated a historic amount for defense in the budget 2026-27. Rs 3,000 billion will be provided for the defense sector. The budget was increased to make the country’s defense invincible due to the uncertain situation in the region and the uncertainty of the region.
Increase in fines for tax evasion
It has been announced to increase the fine rate for tax evasion and irregularities. The fine rate for tax evasion and irregularities was the same for 7 years.
Tax reduced for filers on property purchase
The tax for filers on property purchase has been reduced from 2.5 to 1.25 percent. Federal Finance Minister Muhammad Aurangzeb said while presenting the budget in the National Assembly that the tax for filers on property sale has been reduced from 5.5 to 2.75 percent.
He said that the super tax on income from 150 million to 250 million has been completely abolished.
In addition, the advance income tax rate on exports has been reduced from 2 to 1.2 percent, and it has been announced that the FTR concession on IT export income will continue until June 2029.
Fixed tax for small shopkeepers
A fixed tax system has been introduced for small shopkeepers under the Income Tax Ordinance. According to the Finance Minister, shopkeepers with annual sales of Rs 200 million or less will pay only 1 percent tax on sales under the scheme.
There will be no routine audit of shopkeepers under the Fixed Tax Scheme and small traders will be exempted from having a POS machine.
Shopkeepers who pay tax will be given a ‘green plaque’ with a QR code. If there is a green plaque, FBR officials will not be allowed to enter the shop for questioning. A simple and one-page tax return will be available for shopkeepers in local languages including Urdu.
Benazir Income Support Program
A historic 17% increase in the budget of BISP is proposed, with a total budget of Rs 838 billion proposed.
The coverage of the Kafalat program will be increased to 12 million families. The educational scholarship program will be expanded, which will benefit 9.2 million children.
Karachi
Rs 10 billion has been allocated for Karachi’s water supply project ‘K4’. Rs 6.6 billion has been allocated for industry and trade. The largest portion will be spent on Block A of Karachi Industrial Park.
Azad Kashmir, Gilgit-Baltistan, merged districts
Rs 45 billion has been allocated for Azad Kashmir and Rs 44 billion for Gilgit-Baltistan, while Azad Kashmir will get an additional Rs 5 billion and Gilgit-Baltistan an additional Rs 4 billion as a special package from the Prime Minister.
A development budget of Rs 56 billion has been allocated for the merged districts of Khyber Pakhtunkhwa.
Housing
Rs 54.6 billion has been allocated for the sustainable urban development and housing sector. One lakh 50 thousand affordable and eco-resilient residential units will be built.
Motorways and major highways, transport, Gwadar
Rs 100 billion has been allocated for the dualization of Balochistan’s main highway Karachi-Chaman Expressway. Rs 30 billion will be invested for the completion of the north-south network on the Sukkur-Hyderabad Motorway M6.
According to the Finance Minister, the work of ML-1 Karachi-Rohri section will be done with ADB financing, for which Rs 25 billion has been allocated.
Rs 2 billion has been allocated in the development budget for the Thar Coal Connectivity Railway Project. Rs 93 billion has been allocated for the infrastructure of Gwadar port, transport projects of all four provinces.
Higher Education, Health, Cancer Treatment
According to the Finance Minister, Rs25.1 billion has been allocated for public health care projects, while cancer treatment facilities will be expanded.
Rs46 billion has been allocated for higher education. The amount allocated for higher education is a significant increase compared to last year’s Rs34.9 billion. A total of Rs26.3 billion has been allocated for basic education in schools and colleges.
Budget
According to the budget document, the total volume of the federal budget will be Rs18,771 billion, with an estimated allocation of Rs8,054 billion for interest payments and a total expenditure of Rs1,169 billion on pensions, of which Rs822 billion is estimated for military pensions and Rs272 billion for civil pensions.
Rs3,000 billion is estimated for defense, while Rs1,091 billion is estimated for subsidies.
According to the budget document, the expenditure on the civil government is estimated to be Rs 1071 billion, while Rs 430 billion is estimated to be allocated to deal with the emergency situation, taking the total ongoing expenditure to Rs 17,495 billion.
According to the budget document, the size of the federal development budget will be Rs 1050 billion, while the FBR’s tax collection target is estimated to be Rs 15,264 billion.
