{"id":76928,"date":"2025-06-10T11:55:18","date_gmt":"2025-06-10T06:55:18","guid":{"rendered":"https:\/\/dailyausaf.com\/en\/?p=76928"},"modified":"2025-06-10T21:12:10","modified_gmt":"2025-06-10T16:12:10","slug":"finance-minister-presents-federal-budget-2025-26","status":"publish","type":"post","link":"https:\/\/dailyausaf.com\/en\/business\/finance-minister-presents-federal-budget-2025-26\/","title":{"rendered":"Finance Minister presents federal budget 2025-26"},"content":{"rendered":"

ISLAMABAD: In a recent development, the\u00a0 Finance Minister Muhammad Aurangzeb<\/a> presented the budget 2025-26 to the National Assembly on Tuesday, with a total outlay of Rs17.8 trillion.<\/p>\n

Highlighting economic performance, the finance minister stated that the current account deficit stood at $1.7 billion in the previous fiscal year, but the current year closed with a surplus of $1.5 billion due to government interventions.<\/p>\n

FinMin Muhammad Aurangzeb, while presenting Budget 2025-26, announced a comprehensive economic reform plan that includes key changes to the customs regime, measures to improve water infrastructure, and structural adjustments to State-Owned Enterprises<\/a> (SOEs).<\/p>\n

Aurangzeb revealed that additional customs duty will be phased out in four years, while regulatory duty will be eliminated over five years. He also announced the complete abolition of the Fifth Schedule of the Customs Act 1969 within five years, calling it a necessary step towards simplifying the tax system.<\/p>\n

As part of customs reforms, the number of customs duty slabs will be reduced to four, and the maximum customs duty rate will be lowered from 20 percent to 15 percent.<\/p>\n

The finance minister highlighted that these reforms will benefit multiple sectors, including pharmaceuticals and IT, and help reduce the average tariff, making Pakistan\u2019s trade regime one of the most competitive in the region.<\/p>\n

The government\u00a0<\/span>has\u00a0<\/span>also announced\u00a0<\/span>the<\/span>\u00a0decision to\u00a0<\/span>extend<\/span>\u00a0<\/span>emergency\u00a0<\/span>water storage infrastructure<\/span>.<\/span><\/p>\n

On financial innovation, the minister confirmed that preparations for launching Panda Bonds have been completed<\/span>.<\/span>\u00a0<\/span>This<\/span>\u00a0<\/span>will pave\u00a0<\/span>the way for Pakistan<\/span>‘s<\/span>\u00a0<\/span>access\u00a0<\/span>to\u00a0<\/span>China<\/span>‘<\/span>s capital market and attract foreign investment.<\/span><\/p>\n

Total Budget Outlay for 2025-26<\/h2>\n

\"\"<\/p>\n

GDP expected to grow 4.2%<\/a><\/h2>\n

Speaking about the allocations in the Finance Bill 2026, the finance minister said the federal budget for fiscal year 2025-26 marks the beginning of a comprehensive strategy to build a competitive economy.<\/p>\n

Aurangzeb noted that the country’s GDP is expected to grow 4.2% while the average inflation rate is likely to remain at 7.5% in the next fiscal year. “Budget deficit to be 3.9% of the country’s GDP while primary surplus will be 2.4%.”<\/p>\n

Defence and civil expenditures<\/a><\/h2>\n

Defense spending is projected at PKR 2,550 billion in FY26, up from PKR 2,122 billion. Subsidies are budgeted at PKR 1,186 billion, and civil government operational costs are expected to rise to PKR 971 billion from PKR 839 billion.<\/p>\n

Grants and transfers to provinces are set to fall to PKR 1,619 billion from PKR 1,777 billion. However, under the National Finance Commission (NFC) award, provinces are expected to receive PKR 8,300 billion in FY26, compared with PKR 7,438 billion this year.<\/p>\n

The Public Sector Development Program (PSDP) will receive PKR 1,065 billion\u2014up from PKR 745 billion in FY25.<\/p>\n

Salaries of Govt Employees:<\/a><\/h2>\n

The federal cabinet has\u00a0<\/span>approved<\/span>\u00a0<\/span>a 10%\u00a0<\/span>raise<\/span>\u00a0in the\u00a0<\/span>salary<\/span>\u00a0<\/span>scales\u00a0<\/span>of government employees and a 7%\u00a0<\/span>raise<\/span> in the pensions of retired public servants.<\/span><\/p>\n

Though<\/span>\u00a0<\/span>the cabinet, which\u00a0<\/span>met<\/span>\u00a0on Tuesday, had\u00a0<\/span>broadly<\/span>\u00a0<\/span>nodded<\/span>\u00a0<\/span>through<\/span>\u00a0the\u00a0<\/span>federation<\/span>\u00a0budget for fiscal 2025-26,\u00a0<\/span>the<\/span>\u00a0<\/span>discussion<\/span>\u00a0<\/span>over<\/span>\u00a0salaries\u00a0<\/span>for<\/span>\u00a0government employees and other\u00a0<\/span>issues<\/span>\u00a0continued.<\/span><\/p>\n

The PPP, a key coalition partner of the PML-N government, demanded a further increase in salaries, but the Federal Finance Minister Muhammad Aurangzeb said that the government was already providing the maximum possible relief to the common man in the budget.<\/p>\n

The cabinet proposed a 10% increase in the salaries of government employees.<\/p>\n

Prime Minister Shehbaz Sharif\u00a0accepted<\/span>\u00a0<\/span>the\u00a0<\/span>offer<\/span>\u00a0and\u00a0<\/span>negated<\/span>\u00a0the\u00a0<\/span>offer<\/span>\u00a0of a 6%\u00a0<\/span>increase<\/span>,\u00a0<\/span>saying<\/span>\u00a0<\/span>salaries should\u00a0<\/span>increase<\/span>\u00a0<\/span>by 10%.\u00a0<\/span>The\u00a0<\/span>prime minister and his cabinet\u00a0<\/span>colleague<\/span>\u00a0<\/span>ultimately\u00a0<\/span>approved the decision.<\/span><\/p>\n

Tax Relief for Salary Class<\/a><\/h2>\n

According to the Budget 2025-26, the government has ensured to provide tax relief to the salaried class of Pakistan.<\/p>\n

According to the Finance Bill, salaried earners up to Rs 6 lakh are exempted from tax. People earning a salary of Rs 6 lakh to Rs 1.2 lakh will pay 1 percent tax on the amount above Rs 6 lakh, Finance Bill<\/p>\n

People earning an annual salary of Rs 1.2 lakh to Rs 2.2 lakh will pay a fixed tax of Rs 6,000 and an additional tax of 11 percent. People earning an annual salary of Rs 2.2 lakh to Rs 3.2 lakh will have to pay a fixed tax of Rs 1.16 lakh and an additional tax of 23 percent.<\/p>\n

Additionally, People earning an annual salary of Rs 3.2 lakh to Rs 4.1 lakh will have to pay a fixed tax of Rs 3.46 lakh and an additional tax of 30 percent, the Finance Bill stated.<\/p>\n

Moreover, People earning an annual salary of Rs 4.1 lakh and above will have to pay a fixed tax of Rs 6.16 lakh and an additional tax of 35 percent.<\/p>\n

\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n

Income Tax Slabs for Salaried Individuals<\/span><\/h3>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
\n
\n
\n
\n
\n
\n
\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
50,000<\/span><\/td>\n600,000<\/span><\/td>\n–<\/span><\/td>\n–<\/span><\/td>\n–<\/span><\/td>\n<\/tr>\n
100,000<\/span><\/td>\n1,200,000<\/span><\/td>\n30,000<\/span><\/td>\n6,000<\/span><\/td>\n-24,000<\/span><\/td>\n<\/tr>\n
200,000<\/span><\/td>\n2,400,000<\/span><\/td>\n230,000<\/span><\/td>\n162,000<\/span><\/td>\n-68,000<\/span><\/td>\n<\/tr>\n
300,000<\/span><\/td>\n3,600,000<\/span><\/td>\n550,000<\/span><\/td>\n466,000<\/span><\/td>\n-84,000<\/span><\/td>\n<\/tr>\n
400,000<\/span><\/td>\n4,800,000<\/span><\/td>\n945,000<\/span><\/td>\n861,000<\/span><\/td>\n-84,000<\/span><\/td>\n<\/tr>\n
500,000<\/span><\/td>\n6,000,000<\/span><\/td>\n1,365,000<\/span><\/td>\n1,281,000<\/span><\/td>\n-84,000<\/span><\/td>\n<\/tr>\n
600,000<\/span><\/td>\n7,200,000<\/span><\/td>\n1,785,000<\/span><\/td>\n1,701,000<\/span><\/td>\n-84,000<\/span><\/td>\n<\/tr>\n
700,000<\/span><\/td>\n8,400,000<\/span><\/td>\n2,205,000<\/span><\/td>\n2,121,000<\/span><\/td>\n-84,000<\/span><\/td>\n<\/tr>\n
800,000<\/span><\/td>\n9,600,000<\/span><\/td>\n2,625,000<\/span><\/td>\n2,541,000<\/span><\/td>\n-84,000<\/span><\/td>\n<\/tr>\n
900,000<\/span><\/td>\n10,800,000<\/span><\/td>\n3,349,500<\/span><\/td>\n3,257,100<\/span><\/td>\n-92,400<\/span><\/td>\n<\/tr>\n
1,000,000<\/span><\/td>\n12,000,000<\/span><\/td>\n3,811,500<\/span><\/td>\n3,719,100<\/span><\/td>\n-92,400<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/figure>\n<\/div>\n<\/div>\n<\/div>\n

Over Rs39 billion allocated for Education<\/a><\/h2>\n

\nThe Federal Government has allocated Rs. 39,488 million under the Public Sector Development Programme (PSDP) for the 128 ongoing and 12 new schemes of the Higher Education Commission (HEC) during the fiscal year 2025-26.<\/span><\/div>\n
<\/div>\n
According to the budget document issued here on Tuesday, around Rs 38,488.216 million has been earmarked for the ongoing schemes and Rs 1000 million for the new schemes.<\/div>\n
<\/div>\n
Among the ongoing schemes, an amount of Rs. 500 million is allocated for the Award of Allama Muhammad Iqbal 3000 scholarships to Afghan students (Prime Minister\u2019s Directive), while Rs 200 million have been reserved Construction of Academic Block, Shaheed Zulfiqar Ali Bhutto Medical University (SZABMU), Islamabad (Revised).<\/div>\n
<\/div>\n
The Pakistani government has allocated Rs 250 million for the development of Bacha Khan University’s Main Campus and Rs 500 million for the National University of Medical Sciences. Rs 611 million is reserved for Kamyab Jawan Sports Academies and Youth Olympics, while Rs 558 million is for the University of Baltistan at Skardu. Rs 100 million is allocated for the Fulbright Scholarship Support Program, Rs 2300 million for Overseas Scholarships, and Rs 3670 million for the Ph.D Scholarship Program.<\/div>\n
<\/div>\n

Rs 4,253.738 million allocated for the agriculture sector<\/h2>\n
<\/div>\n
The Pakistani government has allocated Rs 4,253.738 million in its Public Sector Development Program for the fiscal year 2025-26 to uplift the local agriculture and livestock sector.<\/div>\n
<\/div>\n
The program includes 05 new and 10 ongoing projects. The government also allocated Rs 800 million for animal disease surveillance and control, Rs 500 million for commercial olive cultivation promotion, Rs 585 million for command areas enhancement, Rs 500 million for oilseed development, Rs 450 million for agriculture productivity enhancement, and Rs 100 million for the Pakistan model agriculture research centre.<\/div>\n

Hike in Gas bills<\/h2>\n

The forthcoming Federal Budget 2025\u20132026 is expected to see a significant increase in gas prices as the government looks to all sectors for capital.<\/p>\n

Electricity rates are expected to increase by Rs7.12 per unit beginning July 1, 2025, as a result of the power sector’s circular debt surpassing Rs2.396 trillion.<\/p>\n

Additionally, it is estimated that monthly power bills would be subject to a 10% debt service fee (DSS), which will be collected over the following six years.<\/p>\n

The government intends to borrow Rs1.252 trillion from banks to handle repayments. The circular debt of the gas industry has also skyrocketed to Rs2.85 trillion, leading to a projected rise in gas rates of Rs116.90 per MMBTU starting on July 1, 2025, with a follow-up increase set for February 15, 2026<\/p>\n

 <\/p>\n

More to Follow…<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

ISLAMABAD: In a recent development, the\u00a0 Finance Minister Muhammad Aurangzeb presented the budget 2025-26 to the National Assembly on Tuesday, with a total outlay of Rs17.8 trillion. Highlighting economic performance, the finance minister stated that the current account deficit stood at $1.7 billion in the previous fiscal year, but the current year closed with a […]<\/p>\n","protected":false},"author":9,"featured_media":76970,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,13446],"tags":[18425,29363,29369],"class_list":["post-76928","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-featured","tag-federal-budget","tag-fy-2025-2026","tag-tax-relief-for-salary-class"],"_links":{"self":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/76928","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/comments?post=76928"}],"version-history":[{"count":13,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/76928\/revisions"}],"predecessor-version":[{"id":76969,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/76928\/revisions\/76969"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media\/76970"}],"wp:attachment":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media?parent=76928"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/categories?post=76928"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/tags?post=76928"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}