ISLAMABAD – The budget documents for the fiscal year 2025–26 have been revealed ahead of the formal presentation in Parliament. According to details, the total proposed budget size is Rs17,573 billion. Of this, Rs1,000 billion is allocated for development spending, while non-development expenditures are projected to be Rs16,286 billion.

The government proposes Rs2 trillion in new taxes and a 2.5% reduction in income tax across all salary slabs. Salaries and pensions of government employees are expected to rise by 10%. Employees from grades 1 to 16 may also receive a 30% disparity allowance. Meanwhile, excise duties may be imposed on items like chips, soft drinks, and ice cream.

The documents suggest that the petroleum levy will be raised from Rs78 to Rs100 per liter. Payments for petroleum products may be restricted to digital methods only, with an additional Rs2 per liter charge on cash transactions. Non-filers withdrawing more than Rs50,000 from banks could face an increased tax rate of 1.2%. New tax measures are also expected for YouTubers, freelancers, and non-filers.

Debt servicing is projected to cost Rs8,207 billion, and Rs2,550 billion is proposed for defense spending. A briefing on the budget proposals will be presented to Prime Minister Shehbaz Sharif by the economic team shortly. The federal development budget is set at Rs1,000 billion, while provincial annual development programs are expected to receive Rs2,869 billion.

Key allocations include Rs226.98 billion for the National Highway Authority (NHA), Rs90.22 billion for the Power Division, and Rs133.42 billion for Water Resources. Over Rs70 billion is proposed for parliamentarians’ development schemes. Furthermore, Rs82 billion is allocated for AJK and GB, Rs11.55 billion for the Defense Division, and Rs18.58 billion for federal education and training initiatives.