ISLAMABAD: Finance Minister Muhammad Aurangzeb presented the Federal Budget for 2025-26 in the National Assembly. During his speech, he commended Pakistan’s military and political leadership for their efforts in ensuring national security, stating that the armed forces had effectively countered threats.
He highlighted the government’s economic achievements, including a primary surplus of 2.4% of GDP and a reduction in inflation to 4.7%. However, the budget session was disrupted by opposition protests, with PTI and Sunni Ittehad Council members rejecting the budget as “IMF-backed” and claiming the government lacked a legitimate mandate.
Key Budget Proposals:
Economic Reforms:
– The current account deficit of $1.7 billion has turned into a surplus of $1.5 billion.
– Customs duties will be restructured, with regulatory duties eliminated within five years.
– The maximum customs duty rate will be reduced from 20% to 15%.
Infrastructure & Investment:
– Rs 100 billion allocated for the Karachi-Chaman N-25 highway.
– Rs 15 billion for the Karachi-Hyderabad-Sukkur motorway.
– Plans to issue Panda Bonds to attract Chinese investment.
Privatization & SOE Reforms:
– Pakistan International Airlines (PIA) and Roosevelt Hotel to be privatized.
– Power distribution and generation companies (DISCOs/GENCOs) will also undergo privatization.
– 45 government entities marked for closure or downsizing.
Taxation Changes:
– Income tax cuts for salaried individuals (e.g., 2.5% tax on incomes between Rs 600,000–1.2 million).
– Tax on cash withdrawals for non-filers increased from 0.6% to 1%.
– Wealth statements mandatory for property and vehicle purchases.
– 18% sales tax imposed on imported solar panels to encourage local production.
Social Welfare & Development:
– Rs 716 billion allocated for the Benazir Income Support Programme.
– Funds reserved for AJK, merged districts of KP, and Balochistan.
Support for IT & SMEs:
– IT export target set at $25 billion over five years.
– Rs 100 billion in financing for SMEs by 2028.
Housing & Judicial Reforms:
– Easier mortgage conditions for low-income housing.
– Special courts to be established for overseas Pakistanis.
The budget focuses on economic stability, infrastructure development, and social welfare but faces strong opposition criticism.
