Pakistan’s federal government has presented a historic budget of 175 trillion rupees for the 2025-26 fiscal year. The budget was unveiled by Finance Minister Muhammad Aurangzeb in the National Assembly, amid protests from opposition members. In his speech, the minister emphasized economic progress and congratulated Pakistan’s leadership for its recent victory in the war with India. He also highlighted strong national unity during the conflict, which has strengthened the country’s global reputation.
To improve financial conditions, the budget proposes a 10% salary increase for government employees and a 7% pension hike for retirees. Additionally, income tax reductions aim to provide relief. The tax rate for individuals earning between 600,000 and 1.2 million rupees annually will drop to 2.5% from 5%. Those making up to 2.2 million rupees yearly will see their tax rate reduced from 15% to 11%, while the rate for 2.2 to 3.2 million rupees will be lowered from 25% to 23%.
The real estate sector will also benefit, as property-related taxes are being cut to encourage investment. The withholding tax on property purchases is being lowered from 4% to 2.5%, while the tax on property sales will drop from 3.5% to 2%. These measures aim to boost economic activity and make real estate transactions more affordable for citizens.
Despite past economic challenges, inflation has declined, and remittances have surged to $36 billion in the last 10 months. The government attributes this success to economic reforms and stability measures. By implementing tax cuts and financial incentives, policymakers hope to ensure long-term growth and make daily life easier for Pakistanis.
Looking ahead, officials promise continued reforms to further strengthen Pakistan’s economy and enhance its global influence. With an emphasis on stability and development, this budget aims to lay the foundation for a stronger financial future.