ISLAMABAD (Kashmir English): The federal government Tuesday presented the Rs17.573 trillion “growth-oriented” federal budget for the fiscal year 2025-26.
Presenting the federal budget in the National Assembly, finance minister Senator Muhammad Aurangzeb said that the budget for the upcoming fiscal year is the beginning of the strategy especially chalked out to promote a competitive economy.
He said the government is pursuing a strategy that will help increase foreign exchange reserves, reduce the fiscal payment imbalances, thus promoting the overall economic productivity.
Key takeaways from federal budget
Total budget outlay set at Rs17.573 trillion, down 7% from last year
Economic growth target set at 4.2%; fiscal deficit targeted at 3.9% of GDP
Debt servicing at Rs8,210 billion, nearly half of the total budget
Defence spending increased by 20.2% to Rs2550 billion, now 1.97% of GDP
Tax collection target set at Rs14.131 trillion, an 18.7% increase
FBR’s tax-to-GDP ratio raised to 10.4%, with a historic 1.6% increase in one year
Salaried class tax relief introduced; new slabs starting from 2.5% for Rs0.6m-Rs1.2m income
Super tax on corporations (Rs200m-Rs500m) reduced to 5%
18% tax proposed on imported solar panels, digital platforms, petrol/diesel/hybrid cars
Federal PSDP allocation reduced by 20% to Rs1.354 trillion
Provincial PSDP increased by 36.9% to Rs2.869 trillion
Non-tax revenue target fixed at Rs5.15 trillion
7% increase in pension for retired employees; 10% salary increase for Grade 1–22 employees
IT exports target set at $25 billion in 5 years
Overall expenditures of federal government estimated at Rs17,573 billion
Rs1,186 billion allocated for subsidies on electricity, and other sectors
Educational scholarship programme to be expanded and Rs12 million children will benefit
