Islamabad: The Federal Budget 2025-26 has been officially passed by the National Assembly of Pakistan, with a total outlay of PKR 17.573 trillion.
For an in-depth breakdown of how the Pakistan Budget FY25 was unveiled and its initial reactions, read the full coverage here.
The session, chaired by Speaker Sardar Ayaz Sadiq, included a clause-by-clause approval of the Finance Bill 2025, with all government proposals adopted and all opposition amendments rejected.
The budget was introduced by Finance Minister Muhammad Aurangzeb and approved by a majority vote. Opposition members attempted to delay the process, calling for public consultation, but their proposed amendments—including those by Aliya Kamran and Mubeen Arif—were dismissed due to lack of numerical strength.
Key Reforms and Amendments in the Pakistan Budget 2025-26:
1. Crackdown on Tax Fraud (FBR Regulations):
The government approved new clauses empowering authorities to arrest individuals involved in sales tax fraud, fake invoicing, evidence tampering, and illegal overseas transfers. As per the FBR tax fraud rules, arrest becomes mandatory if the fraudulent amount exceeds PKR 50 million, but prior approval from a high-level committee is required.
2. Carbon Levy on Petroleum Products:
A carbon levy of PKR 2.50 per liter has been imposed on all petroleum products in Pakistan, under Clause 3 of the Finance Bill.
3. Lawmakers’ Salaries Adjusted:
New legislation allows a House Committee to determine salary structures for parliamentarians, and ministers’ salaries will be aligned accordingly. These adjustments aim to bring transparency and parity in public sector compensation.
4. Customs Act 1969 Amendments:
The budget includes revisions to the Customs Act 1969, introducing a digital cargo tracking system and E-Bilty System. These tools will support anti-smuggling efforts and are backed by heavy fines and imprisonment clauses for non-compliance.
5. Sales Tax on Solar Panels:
Despite protests from the opposition, a 10% sales tax on solar panels was approved. This decision has drawn criticism but remains part of the finalized budget.
6. Revised Income Tax Slabs – Salaried Class:
The Federal Budget 2025-26 has introduced new income tax slabs for salaried individuals in Pakistan:
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Income up to PKR 600,000: Exempt
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PKR 600,001 – 1,200,000: 1%
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PKR 1,200,001 – 2,200,000: PKR 6,000 fixed + 11%
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PKR 2,200,001 – 3,200,000: PKR 116,000 fixed + 23%
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PKR 3,200,001 – 4,100,000: PKR 346,000 fixed + 30%
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Above PKR 4,100,000: PKR 616,000 fixed + 35%
These changes significantly impact the salary tax in Pakistan for 2025. To explore how these new tax slabs impact salaried individuals and middle-income groups, check our detailed analysis on Pakistan’s Budget 2025 tax relief measures.
7. Pension Taxation Introduced:
A 5% tax will now apply to pension income exceeding PKR 10 million annually. Pensions below this threshold remain exempt, aligning with new pension tax policies in Pakistan.
8. Anti-Smuggling Measures Enhanced:
Clause 225 introduces a Customs Command Fund, with proceeds from auctioned goods used to strengthen anti-smuggling operations. A Digital Enforcement System will also be rolled out nationwide.
Bilawal Bhutto Supports Federal Budget 2025-26:
PPP Chairman Bilawal Bhutto Zardari voiced support for the Pakistan Budget 2025-26, citing acceptance of key PPP recommendations such as a 20% increase in the Benazir Income Support Programme (BISP) and tax relief for the salaried class.
The Federal Budget 2025-26 was presented after federal cabinet approval under Prime Minister Shehbaz Sharif. Government officials claim the budget focuses on development, tax reform, and anti-smuggling efforts, though the opposition continues to call it anti-people.
The next session of the Pakistan National Assembly budget proceedings will reconvene at 11:00 AM tomorrow.
For Urdu readers, a complete breakdown of the Federal Budget 2025-26, its approval process, and rejected opposition amendments is available here in Urdu.
