Pakistan budget 2026-27: Key relief measures for everyday citizens

ISLAMABAD: Pakistan's proposed federal budget for fiscal year 2026-27 was presented in the National Assembly on Friday, outlining a range of tax relief measures, welfare initiatives and investment incentives aimed at supporting households, businesses and economic growth.

Detailed coverage of the proposed budget, including key allocations and policy measures, is available on Pakistan TV Digital.

Below, we examine how the budget proposals could affect ordinary Pakistanis and highlight the relief measures, incentives and facilities the government plans to introduce in the upcoming fiscal year, subject to parliamentary approval.

• 7% increase in salaries of government employees,
• 7% increase in the pension of retired government servants,
• 10% increase in minimum wages is proposed in the budget,
• Reduction in taxes on salaries. Details in the table,

• Abolition of surcharge on salaries,
• Significant reduction in customs duty, additional customs duty and regulatory duty on a variety of raw materials and related items. This will benefit exports, chemical sector, Small and Medium Enterprises (SMEs),
• Complete abolition of customs duty on the raw materials of more than 100 locally manufactured cancer and other medicines,
• Concessions on electric motorcycles, auto-rahkhaws, cars and buses will continue,
• One percent sales tax on imported electric trucks is proposed,
• Withholding Tax on the transfer of properties is being reduced from 2.5% to 1.25% on purchase and from 5.5% to 2.75% on sales.
• One to 7.5% tax on all the 6 slabs of business income, ranging from Rs 150-500 million, is being abolished,
• Abolition of Federal Excise Duty (FED) on foreign air travel in business class,
• Real-time Production Monitoring Program to gauge exact revenue potential of industrial units and Digital Invoicing Network for transparency in supply chain will be retained during the next fiscal year to enhance revenue.
• An automatic mechanism is being introduced to pinpoint discrepancies between the data provided by the taxpayer and the data available with the FBR through different means. This will reduce expenses, delay and botheration to the taxpayers caused in conventional system,
• Abolition of all kind of taxes on contraceptives,
• Abolition of all kind of taxes on sanitary pads,
• Abolition of Capital Value Tax on foreign assets,
• Withholding Tax on the use of credit and debit cards of Pakistani banks on foreign lands is being reduced to 0.5%,
• Advance Income Tax and Minimum Tax on exports are being reduced to 1.25%,
• Concession of 0.25% FTR (Final Tax Regime) is to expire on June 30, 2026. This concession is being further extended for 3 years (till June 30, 2029),
• A total of Rs 144.9 billion developmental budget has been earmarked for the merged tribal districts of Khyber Pakhtunkhwa, AJK and GB. This includes Rs 45 billion for AJK, Rs 56 billion for the merged districts of Khyber Pakhtunkhwa, and Rs 5 billion and Rs 4 billion for AJK and GB, respectively.
• Construction of 150000 cheap and climate resistant on the federal and provincial levels and
• 12 million families will be covered under the BISP.