ISLAMABAD: Finance Minister Muhammad Aurangzeb Khan presented the Federal Budget 2025-26 worth over Rs17.5 trillion in National Assembly amid uproar and slogan chanting by the opposition members.
The budget session was held under the chairmanship of Speaker Ayaz Sadiq with Prime Minister Shehbaz Sharif also in attendance.
The session witnessed a noisy protest from the opposition benches during the finance minister’s speech.
Minister Aurangzeb said the budget was being presented at a “critical and historic moment,” referring to the recent Pakistan-India war. He congratulated the military and political leadership on the success in the conflict, saying it had elevated Pakistan’s stature on the global stage.
“Our national unity and resolve are now focused on economic progress,” he stated, adding that economic reforms have led to improved stability. Inflation has decreased significantly, and remittances have reached $36 billion in the past 10 months, according to the minister.
Among the main points of the budget proposals were a 10% increase in the salaries of government employees and a 7% increase in pensions for retired employees.
The government has also proposed reductions in income tax rates across several salary brackets. For annual salaries between Rs600,000 and Rs1.2 million, the tax rate has been reduced from 5% to 2.5%.
For annual salaries of Rs2.2 million, the minimum tax rate has been decreased from 15% to 11%. For salaries ranging from Rs2.2 million to Rs3.2 million, the tax rate has been reduced from 25% to 23%.
Moreover, thirty percent Disparity Reduction Allowance for deserving government employees has been proposed in the budget.
In recognition of their services, it has been proposed to give a Special Relief Allowance to the Officers, JCOs and Soldiers of the Armed Forces of Pakistan. These expenditures will be met from the allocated Defence Budget of 2025-26.
Property tax adjustments
Withholding tax on property purchases has been proposed to be reduced from 4% to 2.5% in one category. From 3.5% to 2% in another. The finance minister said the focus of the budget was on continued economic reform, stabilization, and growth, with incentives for the salaried class and real estate sector.
The minister announced that sixty percent of the total PSDP will be spent on basic infrastructure projects so that the entire country benefits from it. He said the focus of provincial ADBs is social sector, for which sixty percent of allocations will be made.
The minister said an effort has been made to align ongoing and new initiatives with Uraan Pakistan and National Economic Transformation Plan which is based on five Es.
Giving a break up of PSDP 2025-26, the minister said out of one thousand billion rupees, the biggest amount of 328 billion rupees has been earmarked for transport infrastructure projects. He said special emphasis has also been laid on road infrastructure projects.
