ISLAMABAD: The federal cabinet, under the chairmanship of Prime Minister Shehbaz Sharif, has approved the Rs18 trillion federal budget for the fiscal year 2025-26. The approval came during a key cabinet meeting held in Islamabad.
According to official sources, the cabinet also approved a 6% increase in salaries for government employees and a 7% hike in pensions for retired workers. The finalized budget documents were delivered to Parliament House under tight police security ahead of their presentation in the National Assembly today.
The budget includes Rs2 trillion in new taxes, aimed at increasing revenue. Total non-development expenditures are expected to reach Rs16.28 trillion, while the projected budget deficit is 5% of GDP, amounting to Rs6.5 trillion.
The government is also considering removing all tax exemptions across various sectors. The Federal Board of Revenue (FBR) has set a tax revenue target of Rs14.13 trillion, while non-tax revenue is expected to reach Rs5.17 trillion.
Combined, the total revenue target for the upcoming fiscal year is Rs19.3 trillion. The government aims to improve fiscal discipline and enhance domestic revenue to manage rising expenses and debt servicing.