Islamabad, 30 May 2025: Govt Budget 2025 preparations are in their final phase as the government considers key reforms to provide financial relief to salaried workers and promote growth in the manufacturing and agricultural sectors.
Insiders familiar with the matter revealed that the draft budget includes proposals to revise income tax brackets and raise public sector wages.
Proposed Income Tax Cuts for Salaried Employees
In a move expected to benefit the working class, the government is planning adjustments to income tax rates for the upcoming fiscal year 2025–26.
As part of the Govt Budget 2025, officials have proposed cutting the income tax on a monthly salary of Rs 100,000 from 5% to 2.5%.
READ MORE: Budget 2025-26: Govt Announces Final Date
Similarly, employees earning Rs 183,000 per month may see a tax reduction from 15% to 12.5%. Additional recommendations suggest reducing the tax on Rs 267,000 monthly salaries from 25% to 22.5%, and lowering the rate for Rs 333,000 income from 30% to 27.5%.
Support for Manufacturing and Agriculture
Under the Govt Budget 2025, the government is considering eliminating the Rs 200 billion withholding tax currently applied to raw materials in the manufacturing sector. A similar reduction is under review for construction-related materials.
In agriculture, a new concessional loan scheme for small-scale farmers is being discussed to enhance productivity and access to credit.
IMF Engagement and Budget Date Confirmed
Virtual consultations between Pakistan’s economic team and the International Monetary Fund (IMF) are ongoing. Sources indicate that the IMF has responded positively to relief proposals but has requested an alternative plan to offset revenue losses. These recommendations are being reviewed in continuous dialogue with the Fund.
READ MORE: Govt to Present 2025-26 Budget in June
Meanwhile, Finance Secretary Imdadullah Bosal confirmed that the federal budget will be tabled in Parliament on June 10, dismissing rumours of a date change.
Additionally, the Annual Plan Coordination Committee (APCC) is set to meet on June 2 to finalize the Public Sector Development Programme (PSDP).
Following this, the National Economic Council (NEC) will review the budget framework, including GDP growth targets for the next year.
