Budget 2026-27 Passed with Revisions
The National Assembly of Pakistan has approved the Budget for fiscal year 2026-27, incorporating revisions to the treasury-proposed Finance Bill. The lower house rejected all 63 amendments tabled by the opposition. A notable feature is the first-ever contribution from the provinces, amounting to Rs1 trillion.
Tax Reforms and Compliance Measures
As the economy transitions from stabilization to growth, the budget revises income tax slabs for salaried individuals and introduces new levies and exemptions for corporate entities, digital income streams, and property transactions. The budget targets Rs15,264 billion in tax revenue. To ensure compliance, penalties of up to Rs2 million have been introduced for non-filers.
Last-Minute Amendments
Last-minute revisions include revised taxation rates for banking, fertilizer, and corporate sectors, a reduction in duties on imported vehicles, and higher tariffs on imported electric vehicles. The underperforming agriculture and industrial sectors will now face taxes on income above specified thresholds.
Opposition Response and Political Dynamics
The opposition dismissed the budget as anti-people. However, opposition leader Mehmood Achakzai called for political reconciliation and inclusion of the opposition in decision-making. The Pakistan Peoples Party (PPP) returned to the fold after a brief display of estrangement, ensuring that National Finance Commission (NFC) and Benazir Income Support Programme (BISP) allocations remain untouched.
Budget Breakdown and Fiscal Targets
The Rs18.8 trillion budget envisages a growth target of 4%, a fiscal deficit of 3.6% of GDP, and inflation around 8.2%. Debt servicing will consume Rs8,045 billion, defence Rs3,000 billion, and day-to-day government expenses Rs1,071 billion. The Public Sector Development Programme (PSDP) receives only Rs1 trillion. Despite a rhetorical shift toward stabilization, the budget remains burdened by debt and defence, with public development as an afterthought.
