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Pakistan News

Pakistan unveils Rs18.77 Trillion federal budget for FY 2026–27

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Pakistan unveils

ISLAMABAD:  Pakistan on Friday unveiled a Rs18.771 trillion federal budget for the fiscal year 2026–27, focusing on fiscal consolidation, tax reforms, defense spending, development projects, and targeted relief measures, Finance Minister Muhammad Aurangzeb announced in the National Assembly.

Presenting his third budget, the finance minister thanked coalition partners and said the government remained committed to stabilizing the economy and sustaining growth momentum.

Aurangzeb said Pakistan’s economy had reached $452 billion, while per capita income increased from $1,751 to $1,901. He added that GDP growth stood at 3.7% in the outgoing fiscal year, despite economic challenges including floods and regional geopolitical tensions.

He said large-scale manufacturing grew by 6.1%, while the services sector posted 4.1% growth. Foreign exchange reserves have risen from $4 billion three years ago to over $17 billion, enough to cover three months of imports, he said.

Remittances reached $38 billion in the first 11 months of the current fiscal year and are expected to exceed $41 billion by year-end, the minister added.

Budget Deficit and Revenue Targets

The government projected GDP growth of 4% for the next fiscal year, with inflation estimated at 8.2%. The budget deficit is expected at 3.6% of GDP, while the primary surplus is projected at 2%.

Federal Board of Revenue (FBR) tax collection has been set at Rs15.264 trillion, while total federal expenditures are estimated at Rs18.771 trillion. Interest payments alone account for Rs8.054 trillion.

Defense, Salaries and Welfare Spending

Defense expenditure has been allocated Rs3 trillion. Pension costs are estimated at Rs1.169 trillion, including Rs822 billion for military pensions.

Civil administration spending is set at Rs1.071 trillion, while subsidies amount to Rs1.091 trillion.

The government announced a 7% increase in salaries and pensions for federal employees and a 10% increase in the minimum wage.

The Benazir Income Support Programme (BISP) has been allocated Rs838 billion, a 17% increase from the previous year.

Tax Reforms and Relief Measures

The budget proposes relief for salaried individuals across multiple income slabs and the abolition of a 9% surcharge on salaried income.

It also proposes the elimination of super tax for income between Rs15 crore and Rs50 crore, while reducing the rate for higher incomes from 10% to 8%. However, the levy will remain on banks, oil and gas exploration companies, and fertilizer firms.

A fixed tax regime is being introduced for small shopkeepers with annual sales below Rs20 crore, allowing them to pay 1% tax on turnover.

Taxes on property transactions, exports, and foreign card usage have also been reduced, while capital value tax on foreign assets has been abolished.

Energy, Development and Infrastructure

The Public Sector Development Programme (PSDP) has been set at Rs1 trillion, while the overall development budget stands at Rs3.675 trillion, including provincial shares.

Major allocations include Rs100 billion for the N-25 highway upgrade, Rs30 billion for the Sukkur-Hyderabad motorway, and Rs25 billion for initial work on ML-1.

The government also allocated funds for water projects, including Rs14 billion for Diamer-Bhasha Dam, Rs22 billion for Mohmand Dam, and Rs10 billion for the K-IV water project in Karachi.

Vehicle and Energy Taxes

The budget introduces new Federal Excise Duty proposals on imported SUVs and luxury vehicles, including higher rates for vehicles above 3,000cc and taxes on electric vehicles priced above Rs20 million. Incentives for electric motorcycles, rickshaws, and buses will continue, while a 1% sales tax facility is proposed for imported electric trucks.

Social and Sectoral Spending

Health development projects have been allocated Rs25.1 billion, while higher education receives Rs46 billion. Women’s health products and contraceptives will be tax-free under the new proposals.

The IT sector export income tax incentive of 0.25% has been extended for three years.

Officials said the budget aims to balance growth, revenue generation, and targeted social support while maintaining macroeconomic stability.

Pakistan to present Rs17.5 Trillion federal budget for 2026-27

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Pakistan

ISLAMABAD: Federal government is set to present a federal budget exceeding 17.5 trillion rupees for the fiscal year 2026-27 on Friday, with proposals under consideration for salary and pension increases for government employees and tax relief measures worth up to 50 billion rupees.

According to official reports, Prime Minister Shehbaz Sharif will chair a special federal cabinet meeting to approve the budget draft and related fiscal proposals before it is presented in parliament by Finance Minister Muhammad Aurangzeb.

The budget aims to set tax revenue targets at around 15.267 trillion rupees, while also offering potential relief for salaried individuals through revisions in income tax slabs.

Officials said no major changes are expected in taxes on solar panels, stationery items, or the stock market. A previously proposed increase in sales tax on solar panels from 10% to 18% has been withdrawn.

However, the government is considering raising sales tax on imported electric vehicles up to 25%, while maintaining existing tax rates on hybrid vehicles. Incentives for locally manufactured electric vehicles are also under review, including reduced duties on motors, batteries, and other components.

A petroleum levy target of 1.727 trillion rupees has been proposed for the upcoming fiscal year. Debt servicing is expected to require 7.824 trillion rupees, while defence spending is projected at around 3 trillion rupees.

Economic projections suggest exports of $32.8 billion against imports of $70 billion, leaving a projected trade deficit of more than $37 billion.

Growth targets include 3.8% for agriculture, 4% for industry, 4.5% for large-scale manufacturing, and 4.2% for the services sector. The government also aims to create 2 million new jobs across agriculture, industry, and services.

Officials said the National Economic Council has already approved a national development plan worth 3.669 trillion rupees, including a federal Public Sector Development Programme of 1 trillion rupees.

The budget also includes proposals for new taxation measures, including bringing cryptocurrency transactions into the tax net and imposing capital gains tax on crypto trading profits. Officials are also considering removing tax exemptions for former tribal areas and expanding sales tax coverage on several food and consumer goods.

Authorities said up to 220 billion rupees in new taxes may be introduced, with overall revenue enhancement measures expected to generate up to 1 trillion rupees in additional income.

Finance Minister highlights 3.7% growth despite external pressures

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Finance Minister

ISLAMABAD: Pakistan’s economy demonstrated resilience during the outgoing fiscal year despite domestic and international challenges, Finance Minister Muhammad Aurangzeb said Thursday while presenting the National Economic Survey.

Speaking in Islamabad, Aurangzeb said the survey reflects the country’s economic performance over the entire fiscal year, which began amid uncertainty caused by monsoon-related disruptions and global economic volatility, including tariff measures imposed by the United States on several countries.

He said the government successfully navigated multiple crises and that the economy performed better than expected despite internal and external pressures. Pakistan recorded economic growth of 3.7%, slightly below the government’s target of more than 4%.

Aurangzeb said the growth rate would likely have exceeded 4% had it not been for the crisis in the Middle East. He added that Pakistan’s economy expanded to more than $452 billion, while per capita annual income increased from $1,751 to $1,901.

The finance minister noted that global uncertainty had affected economies worldwide but said Pakistan maintained positive economic momentum despite regional tensions.

He said the petroleum sector posted 5% growth, while the current account recorded a surplus of $72 million during the July-March period. The agricultural sector grew by 2.89%, with dairy and livestock accounting for about 60% of agricultural output.

Aurangzeb also highlighted gains in exports, saying sports goods exports have surpassed $3 billion and information technology exports are expected to reach $4.5 billion. He noted that footballs manufactured in Pakistan will be used at the FIFA World Cup.

The minister said reducing imports remains a government priority and added that foreign exchange reserves currently stand at $17.1 billion and are projected to reach $18 billion by the end of June.

10 tourists killed as van catches fire after crash on Murree Expressway

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10 tourists killed

MURREE: At least 10 tourists were killed and 13 others injured when a passenger van crashed and caught fire on the Murree Expressway at Khajut, officials said.

According to Murree Deputy Commissioner Agha Zaheer Abbas Shirazi, the van carrying 23 passengers from Multan met with an accident after reportedly hitting a roadside barrier. The impact led to a fire in the engine, while the sliding door of the vehicle became jammed, trapping passengers inside.

Rescue officials said the injured were shifted to nearby hospitals for emergency treatment.

Motorway Police confirmed that 13 people sustained injuries in the accident.

Authorities said the vehicle had departed from Multan around 2 a.m. and was en route to Murree. Over-speeding is believed to be a key factor behind the crash, though an investigation is underway.

Officials also confirmed that 10 children were among those traveling in the ill-fated vehicle.

National Assembly Speaker expresses grief over deadly Murree Expressway crash

National Assembly Speaker Sardar Ayaz Sadiq expressed deep sorrow over the tragic fire-related accident on the Murree Expressway that claimed multiple lives.

He conveyed heartfelt condolences and sympathy to the families of those killed in the incident, saying he shared the grief of the bereaved families.

The Speaker described the accident as “deeply unfortunate” and prayed for the forgiveness of those who lost their lives.

He also prayed for the speedy recovery of the injured and directed the relevant authorities to ensure the provision of the best possible medical treatment to them.

Sadiq further extended his prayers for strength and patience for the families affected by the tragedy.

PSDP cuts agreed as Pakistan moves closer to budget 2026–27 approval

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PSDP cuts

ISLAMABAD: Pakistan’s coalition partners Pakistan Muslim League-Nawaz (PML-N) and Pakistan Peoples Party (PPP) have agreed on cuts to the Public Sector Development Programme (PSDP), paving the way for the approval of the federal budget for 2026–27, officials said on Wednesday.

Following a meeting between the leadership of both parties, it was agreed to reduce development spending at the federal and provincial levels, helping streamline the budget process.

President Asif Ali Zardari approved summoning sessions of the National Assembly at 5 p.m. and the Senate at 4 p.m. today, officials said.

According to sources, the federal government has reduced the proposed PSDP by Rs 126 billion, while additional cuts are expected across provincial development programs except in Balochistan.

The adjustments are expected to generate around Rs 500 billion in savings, which will be redirected toward strategically important projects, including major water and energy schemes such as Diamer-Bhasha, Mohmand, and Dasu dams.

Officials said the federal government had initially sought nearly Rs 1.2 trillion in additional fiscal space from provinces, but revised arrangements are now under consideration. Balochistan’s development program will remain unchanged due to its revised allocation of Rs 308 billion.

Sources said the National Economic Council meeting, chaired by Prime Minister Shehbaz Sharif, will finalize key decisions regarding the PSDP size and broader budget framework. The federal budget for 2026–27 is expected to be presented after approval from cabinet and parliamentary forums.

The government is also considering adjustments in provincial shares, defense spending requirements, and potential relief measures for salaried individuals and the corporate sector, depending on fiscal space.

Pakistan Army Mi-17 helicopter crashes near Muzaffarabad

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Pakistan Army

RAWALPINDI: An Mi-17 helicopter of Pakistan Army Aviation crashed near Muzaffarabad during take-off due to a technical fault, the Inter-Services Public Relations (ISPR) said on Wednesday.

According to the military’s media wing, all personnel on board were killed in the incident. There were no survivors.

Rescue and recovery teams immediately reached the crash site and launched operations.

ISPR said a board of inquiry has been ordered to determine the exact technical cause of the crash.

The Chief of Army Staff and all ranks of the Pakistan Army expressed deep grief over the loss of precious lives and extended heartfelt condolences to the families of the deceased.

President Asif Ali Zardari expressed deep sorrow and grief over the crash of a Pakistan Army Mi-17 helicopter near Muzaffarabad.

The president extended heartfelt condolences and sympathy to the families of the personnel who were martyred in the incident.

He said the nation pays tribute to the sacrifices of the martyrs and stands in solidarity with their bereaved families in their time of grief.

Zardari prayed for the elevation of the ranks of the deceased and for patience and strength for their loved ones.

COAS Asim Munir, Lebanese military chief hold talks on regional security

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COAS Asim Munir

RAWALPINDI: Lebanese Armed Forces Commander-in-Chief General Rodolphe Haykal met Chief of Army Staff and Chief of Defence Forces Field Marshal Asim Munir at the General Headquarters (GHQ) in Rawalpindi.

According to the Inter-Services Public Relations (ISPR), Gen. Haykal was presented a guard of honor upon arrival at GHQ by a smartly turned-out contingent of the Pakistan Army.

During the meeting, both sides discussed matters of mutual interest, regional security developments and ways to enhance bilateral defense cooperation.

The ISPR said both military leaders agreed to strengthen professional ties and expand training collaboration between the armed forces of Pakistan and Lebanon.

Field Marshal Munir underscored the importance of Pakistan’s long-standing and cordial relations with Lebanon and reiterated Islamabad’s commitment to broadening defense cooperation.

Gen. Haykal appreciated the professionalism and operational capabilities of Pakistan’s armed forces and praised Pakistan’s contributions to regional peace and stability.

He also acknowledged Pakistan’s role in international peacekeeping missions.

Both sides expressed a shared resolve to further strengthen institutional linkages and deepen military-to-military engagement.

Federal budget 2026-27 likely to be presented on June 12

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Federal budget

ISLAMABAD: Federal government is considering a change in the announced date for the 2026–27 budget, with consultations underway to present it on June 12 instead of June 10, according to sources.

Officials said a final decision on the revised budget date is expected within a day or two.

Federal Minister Ahsan Iqbal confirmed in informal talks with journalists in Parliament that several budget matters are still under discussion and have not yet been finalized.

He said discussions were ongoing due to limited time and the upcoming month of Muharram, adding that adjustments in scheduling may be required.

Iqbal said talks between the government and coalition partner Pakistan Peoples Party over the Public Sector Development Programme (PSDP) had been completed, and an understanding had been reached on development funding matters.

He added that under the proposed allocations, the federal government will prioritize development spending in smaller provinces.

According to him, Balochistan would receive the highest share of development funds, followed by Sindh, then Khyber Pakhtunkhwa, while Punjab would receive the lowest allocation.

He said billions of rupees have been allocated for key projects, including motorways and water infrastructure initiatives, with further details to be announced in the upcoming budget.

Punjab ready to offer financial relief to federal government

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Punjab ready

LAHORE: The Punjab provincial government is prepared to extend financial relief to the federal government, according to sources in the provincial assembly.

Officials said the Punjab government may provide up to 570 billion rupees in financial relief to help Islamabad reduce its fiscal deficit and meet International Monetary Fund targets.

They added that under the National Finance Commission (NFC) award, Punjab is expected to receive more than 3.793 trillion rupees from the divisible pool of revenues.

Meanwhile, the provincial government has finalized the outline of its budget for the 2026–27 fiscal year, with the total volume set at 5.131 trillion rupees, sources said.

No official statement has yet been issued by the Punjab government confirming the reported financial arrangement.

On the other hand, Punjab Finance Minister Mujtaba Shuja-ur-Rehman said the province will not compromise on its share under the National Finance Commission (NFC) award and will strongly defend its constitutional rights if any reduction is made.

Addressing a pre-budget roundtable conference in Lahore, he said Punjab is currently running more than 100 major development programs and requires adequate financial resources to sustain them.

He warned that if Punjab’s share in the NFC award is reduced, the province would “defend its rights,” adding that Punjab cannot transfer or surrender its financial resources under any circumstances.

The finance minister said the provincial government is working on establishing a unified tax collection system under one roof to improve efficiency and revenue collection. He added that efforts are also underway to promote agriculture and industry, along with the preparation of a major industrial package expected to involve billions of rupees over the next three years.

He said the government aims to reduce taxes rather than introduce new ones.

Maryam Nawaz, he said, is overseeing governance reforms and has resumed work after health improvement.

Mujtaba Shuja-ur-Rehman said Punjab has already presented two budgets and will now present its third budget on June 16.

Government, PPP agree on most budget proposals

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Government

ISLAMABAD: President Asif Ali Zardari met with Prime Minister Shehbaz Sharif at the Aiwan-e-Sadr on Monday to discuss national security, the economic outlook, the upcoming federal budget and key political developments.

The meeting was attended by Deputy Prime Minister and Foreign Minister Ishaq Dar, Interior Minister Mohsin Naqvi, Law Minister Azam Nazeer Tarar, Finance Minister Muhammad Aurangzeb and the prime minister’s adviser on political affairs Rana Sanaullah.

Participants reviewed the national security situation, internal and regional developments, economic conditions, the next fiscal year’s budget, the recent elections in Gilgit-Baltistan, the situation in Azad Jammu and Kashmir, and matters related to law and order.

Discussing budget proposals and public relief measures, President Zardari emphasized the need to prioritize public welfare, provincial rights and economic stability in the upcoming federal budget. He also directed that efforts be made to align economic growth objectives with welfare-oriented initiatives.

Sources said technical committees from both sides would continue consultations on a number of practical and implementable points that still require further deliberation.

During a meeting, Prime Minister Shehbaz Sharif congratulated President Asif Ali Zardari on the PPP’s performance in the recent elections in Gilgit-Baltistan.

According to sources, Sharif remarked with a smile that Bilawal Bhutto Zardari had run a better election campaign than his rivals.

Sources said Raja Faisal Rathore also attended the meeting, where participants discussed the latest developments in Azad Jammu and Kashmir and other matters of national importance.

Interior Minister Mohsin Naqvi briefed the president on his recent visit to Iran and regional diplomatic engagements.