The National Assembly (NA) on Tuesday passed the finance bill 2026-27 for the next fiscal year, with a total outlay of Rs 18.77 trillion, rejecting all amendments presented by the opposition benches from both the National Assembly and Senate. The federal budget 2026-27, moved by Finance Minister Muhammad Aurangzeb, was approved with a majority vote after the opposition members walked out of the proceedings.
Budget Overview and Key Allocations
The federal government had presented the annual budget 2026-27 in parliament on June 12, with an overall size of Rs18.77 trillion. The government has increased salaries and pensions by seven percent for the next fiscal year. It has also recommended a 10 percent increase in the minimum monthly wage, providing relief to low-income workers.
The budget projects an economic growth rate of 4 percent for the fiscal year 2026–27. Inflation is expected to remain at 8.2 percent, while the fiscal deficit has been estimated at 3.6 percent of GDP. The primary surplus is projected to reach 2 percent of GDP. A major chunk of the budget will be utilized for interest payments, estimated at Rs8.1 trillion. Allocations for pensions are projected at Rs1.2 trillion, Rs3 trillion for defense, Rs1.091 trillion for subsidies, Rs1.071 trillion for running the civil government, and Rs430 billion allocated for emergency and other services. The government has earmarked Rs1.276 trillion for development and net lending.
Tax Collection and Provincial Shares
The tax collection target for the Federal Board of Revenue (FBR) has been set at Rs15.3 trillion, and the non-tax collection target has been fixed at Rs5.37 trillion. The share of provinces in federal receipts will be Rs8.8 trillion. Additionally, Rs838 billion has been allocated for the Benazir Income Support Programme (BISP), representing a significant increase from the previous year.
Income Tax Relief for Salaried Class
The government announced major relief for the salaried class through a reduction in income tax for four slabs. The government proposed to slash income tax to 20 percent from 23 percent for salaried individuals earning between Rs2.2 million and Rs3.2 million. For individuals earning between Rs3.2 million and Rs4.1 million, the tax rate has been reduced from 30 percent to 25 percent. For income between Rs4.1 million and Rs5.6 million, the rate has been cut from 35 percent to 29 percent. Similarly, for salaried individuals earning between Rs5.6 million and Rs7 million, the tax rate has been reduced to 32 percent from 35 percent.
Prime Minister Shehbaz Sharif's Remarks
Earlier, Prime Minister Shehbaz Sharif expressed hope that the memorandum of understanding signed by the US and Iran before the two sides held talks in Switzerland over the weekend would turn into a “long-lasting agreement.” The prime minister, amid desk-thumping, said the developments at the recent summit in the Swiss resort of Burgenstock, where delegations from the US and Iran held hours-long discussions with Pakistan and Qatar participating as mediators, were significant. He was confident that ‘The Islamabad Memorandum of Understanding’ signed by the United States and Iran will evolve into a long-lasting agreement within sixty days.
“Pakistan played a pivotal and historic role in facilitating the truce between the two countries,” he said, adding that Pakistan made sincere and tireless efforts to bridge the differences between the United States and Iran. Sharif further said relations between the two countries have strengthened over the last three months. He said discussions will be held with the Iranian President to further strengthen them. He also responded to concerns raised by the opposition leader, saying that the government wants development in all four provinces. “I have always said that Pakistan will not progress until all four provinces progress,” he said.
Speaker's Remarks on Parliamentary Decorum
Speaker National Assembly Ayaz Sadiq, responding to concerns raised by opposition leader Mehmood Achakzai, reaffirmed commitment to the constitution, parliamentary decorum, and national unity during the budget session. The Speaker stated that if any constitutional violation had been committed on his part, it should be clearly identified. He remarked that statements made outside the House regarding raising a private force from every household, supporting a foreign country against Pakistan, or making remarks against Pakistan’s armed forces, judiciary, and state institutions would never be allowed on the floor of the House.
He emphasized that parliamentary freedom of expression must be exercised within the framework of the Constitution, rules, and established parliamentary norms. He stated that blocking anti-state, anti-institutional, or inflammatory remarks from being made in the House does not constitute a violation of the Constitution. He added that maintaining the sanctity and dignity of Parliament remains his foremost responsibility.
Sadiq further observed that while some members criticize Parliament and describe it as illegitimate, they nevertheless avail themselves of opportunities to speak beyond their allocated time in parliamentary proceedings. He emphasized that democratic institutions must be respected and strengthened through constructive engagement. The Speaker also noted that parliamentary committees play a vital role in the legislative process and noted that members’ participation in committee proceedings is essential for effective parliamentary oversight and policymaking. He advised members to avoid remarks that may be construed as criticism of fellow parliamentarians and emphasized the importance of maintaining mutual respect and harmony between both Houses of Parliament.
The opposition benches, raising anti-government slogans, walked out of the proceedings when the treasury benches jointly approved the federal budget 2026-27.
