ISLAMABAD June 9, 2025: The federal budget for the fiscal year 2025-26, with an estimated volume of Rs17,600 billion, will be presented tomorrow. According to official sources, the total revenue target for the next fiscal year has been set at Rs19,400 billion, while the tax collection target is Rs14,130 billion.
The government is considering four major proposals for increasing salaries in the upcoming budget. These include a 30% disparity allowance for employees from Grade 1 to 16, and a 15% increase for Grade 17 to 22 officers. A 10% increase in salaries and pensions is also proposed, in line with inflation.
Additionally, merging one of the two previous ad hoc allowances into the basic salary is under discussion. The federal cabinet will make the final decision on these proposals before the budget is presented.
The tax collection targets are detailed as follows:
- Direct taxes: Rs6,470 billion
- Sales tax: Rs4,943 billion
- Federal excise duty: Rs1,153 billion
- Customs duty: Rs1,741 billion
- Petroleum levy: Rs1,311 billion
The government is also planning reforms in the real estate sector. There is a strong possibility of abolishing Federal Excise Duty (FED) on property purchases starting July 1, particularly for overseas Pakistanis. Changes in FED for non-filers and late-filers are also under consideration. The withholding tax structure for real estate transactions may also be revised.
Moreover, from July 1, builders and developers associated with the real estate sector will be required to register under new regulations.
The budget deficit target for FY2025-26 is set at Rs6,200 billion. The defense budget is expected to see an 18% increase, with an estimated Rs2,414 billion allocated for national defense.
The Public Sector Development Programme (PSDP) has been fixed at Rs1,000 billion, while non-tax revenue is estimated at Rs2,584 billion. The provinces are expected to provide a budget surplus of Rs1,220 billion.
Read More: Budget 2025-26: Govt to Tighten Withholding Tax Net for Non-Filers
In terms of economic targets, the GDP growth rate for the upcoming year is projected at 4.2%, with agriculture growth at 4.5%, industrial growth at 4.3%, and services sector growth targeted at 4%.
To boost industrial growth, the government may reduce duties on over 7,000 tariff lines.
Overall, the upcoming budget reflects a blend of fiscal discipline, growth-oriented policies, and targeted relief for salaried individuals and the real estate sector.
