Business Desk 
Jun 10, 2025
Pakistan is set to unveil its much-anticipated Federal Budget 2025-26 on Tuesday with a total outlay of Rs17.8 trillion. Finance Minister Muhammad Aurangzeb will present the budget in the National Assembly, followed by the formal laying of the Finance Bill 2025 before the Senate.
The upcoming budget is expected to introduce key tax reforms while offering limited relief to the salaried class.
Budget 2025-26 updates
Reportedly, the government plans to raise salary increases for government employees by 10%, with pensions recommended at 5% and 7.5% respectively. This would mean that staff from grades 1 to 16 will be granted a 30% special allowance that will be added to their basic salary, replacing the previous ad hoc relief structures.
Budget 2025-26 is being developed with advice from the International Monetary Fund (IMF). Under the guidance of the IMF, the government aims to broaden the tax base, tackle tax avoidance, and increase revenue collection.
Among the proposed steps is the possible introduction of an agricultural income tax for the first time in the history of Pakistan. There may be a tax on digital income, particularly income from freelancing and foreign income.
Capital Gains Tax (CGT), related to property and shares, is likely to be increased. There are reports of tax increases on fertilisers, insecticides and confectionery, but in some instances, taxes on beverages and cigarettes might be lowered. There may also be stipulations covering the extension of the 12% rate to the former FATA region, ending the previous exemption.
