Budget 2025–26: Who Will Benefit and Who Will Be Affected?
Federal Finance Minister Muhammad Aurangzeb has presented the national budget for the upcoming fiscal year 2025–26 with a total outlay exceeding PKR 17.573 trillion. The budget has received mixed reactions—while the salaried class and real estate stakeholders appear relatively satisfied, many quarters have voiced criticism.
Who Stands to Gain?
According to economists, the biggest relief in the budget has been extended to the salaried class. Increases in salaries and pensions for government employees, along with relaxed restrictions in the real estate sector, are measures that have directly benefited these groups.
Economic analyst Abid Suleri remarked that the budget is relatively balanced, despite expectations of a much harsher fiscal plan. He attributes this balance largely to a significant cut in the interest rate, from 22% down to 11%, which eased the government’s debt repayment burden and created room for some public relief.
He also pointed out a few benefits for the agriculture sector, such as no increase in sales tax on fertilizers, which could help farmers to some extent.
However, Suleri also expressed concerns over some decisions, particularly the imposition of an 18% GST on imported solar panels. He argued that if the government truly aims to promote renewable energy, such taxes are counterproductive.
Similarly, increased taxes on credit/debit card transactions for non-filers also reflect a contradiction, especially since many regions in Pakistan lack card payment infrastructure altogether.
Is the Tax Burden Falling Only on the Salaried Class?
Economist Raja Kamran described the budget as a “stabilization budget,” intended to stabilize the economy rather than drive rapid growth. He highlighted that the salaried class now shoulders the largest share of the income tax burden—over PKR 600 billion—while businessmen, factory owners, and the elite largely escape the tax net.
Kamran pointed out that this reflects the systemic inequity in Pakistan’s taxation system. He noted that the government has taken serious steps against non-filers in this budget. Non-filers can no longer purchase vehicles or property unless they file taxes, and the tax on cash withdrawals from bank accounts for non-filers has been reduced to encourage them to join the tax net.
How Will the Government Increase Revenue?
To boost non-tax revenue, the federal government has doubled the petroleum levy. Additionally, a sales tax has been imposed on online purchases. GST on household usage remains unchanged, and some restrictions on property transactions have been eased to revive the real estate market.
Experts say the federal government’s financial position has weakened, as a major portion of tax revenue is now transferred to provinces. However, provinces are not fulfilling their responsibilities effectively. While some progress has been observed in Punjab, other provinces continue to lag in development.
