News Desk:
Islamabad: Federal Minister for Finance and Revenue, Muhammad Aurangzeb, presented the federal budget for fiscal year 2025-26 in the National Assembly of Pakistan today, marking a strategic shift in economic direction through wide-ranging structural reforms and growth-oriented initiatives.
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The budget session, chaired by NA Speaker Ayaz Sadiq, was described by Aurangzeb as taking place at a “historic and critical moment” for the country, especially in the wake of recent tensions with India. He praised the nation’s unity and the leadership’s firm handling of the crisis, stating, “The entire nation stood united, and Pakistan’s international prestige has significantly improved.”
Key Highlights of Pakistan Budget 2025-26
1. Economic Growth & Stability
- GDP growth projected at 4.2%
- Inflation rate forecasted at 7.5%
- Budget deficit contained at 3.9% of GDP
- Primary surplus expected at 2.4% of GDP
Aurangzeb emphasized that the government has stabilized the economy through reform measures and “no mini-budget or new taxes” have been imposed.
2. Major Reforms in FBR
The finance minister announced transformational reforms in the Federal Board of Revenue (FBR), targeting a rise in tax-to-GDP ratio from 10% to 14%.
Key FBR reforms include:
- Digital integration of the tax system
- B2B e-invoicing
- AI-based audit selection
- Faceless e-billing
- Central control unit for tax data centralization
3. Tariff Reforms to Boost Exports
A comprehensive tariff reform package was unveiled:
- Custom duties to be limited to four slabs: 0%, 5%, 10%, and 15%
- Regulatory duties to be phased out in 5 years
- Abolition of the Fifth Schedule of the Customs Act (1969) in 5 years
These reforms aim to enhance Pakistan’s export competitiveness and reduce production costs in key sectors like pharmaceuticals, IT, textiles, telecom, and engineering.
4. Energy Sector Reforms
Significant steps have been taken to reduce power costs and improve efficiency:
- Industrial electricity rates reduced by 31%
- Closure of 3,000 MW furnace oil power plants
- Reorganization of the National Grid Company
- Renewed deals with IPPs to cut energy costs
5. Mining and Infrastructure Projects
Aurangzeb highlighted the strategic importance of the Reko Diq gold and copper project, expected to run for 37 years and generate $75 billion for the national economy.
- Infrastructure work linking Port Qasim to Gwadar through road and rail is already in progress.
6. Capital Market & Investment
Pakistan successfully issued Sukuk bonds via the Pakistan Stock Exchange, and has completed preparations for launching its first-ever Panda bond.
7. Fiscal Vision and Future Direction
Aurangzeb said the 2025-26 budget lays the foundation for a competitive, export-led, and digitally integrated economy, stating:
“This is not just a budget; it is a blueprint for transforming the DNA of Pakistan’s economy. Our focus is sustainable development, fiscal responsibility, and inclusive growth.”
He also noted the Rs800 billion annual burden of Special Economic Zones (SEZs), suggesting upcoming reforms to improve their efficiency and cost-effectiveness.
