Pakistan’s 2025-26 Budget: Key Points

June 21, 2025
Finance Minister Muhammad Aurangzeb outlined Pakistan’s budget priorities, focusing on inclusive growth and fiscal discipline.

✅ Major Decisions:

1. Tax Relief:
   • Income tax cut for earners of ₨600K–1.2M/year: Reduced from 2.5% → 1%.
   • Solar panel tax slashed from 18% → 10%.
2. Salary & Pension Hikes:
   • Government salaries ↑ 10%.
   • Pensions ↑ 7%.
3. Welfare Boost:
   • Benazir Income Support budget ↑ to ₨716 billion (from ₨592B).

💡 Economic Progress:

• Controlled inflation, boosted foreign reserves.
• Federal spending growth capped at 1.9% (vs. 10–12% previously).

📝 Senate Recommendations Accepted (50%):

• Zero tax on educational stationery.
• No tax hike on:
  • 800cc vehicles (stays at 12.5%).
  • Print/media/IT services.
• Call to strengthen Public Finance Act to reduce borrowing.

🔜 Next Steps:

Recommendations sent to National Assembly for final approval.

(Source: Pakistan Senate Session, June 21, 2025)