ISLAMABAD: Pakistan has underscored the importance of ensuring that critical development requirements are reflected in the upcoming federal budget as the government intensifies consultations ahead of the fiscal year 2026-27 budget, expected to set the country's economic and development agenda for the coming year.
The emphasis came during a meeting chaired by Deputy Prime Minister and Foreign Minister Ishaq Dar alongside Finance Minister Muhammad Aurangzeb, bringing together senior federal and Khyber Pakhtunkhwa officials as part of the government's ongoing pre-budget consultation process.
According to a statement issued by the Deputy Prime Minister’s Office, discussions focused on provincial development priorities, ongoing and proposed projects, and measures aimed at supporting economic growth and public welfare.
The consultations form part of the government's broader effort to align federal spending priorities with development needs across the country while sustaining economic stability and growth.
As Pakistan prepares to unveil its federal budget for 2026-27, policymakers are seeking to balance fiscal discipline with investments in infrastructure, public services and economic expansion.
The upcoming budget is expected to outline measures designed to strengthen revenue collection, support development projects and create conditions for long-term economic resilience.
The Deputy Prime Minister’s Office said the meeting placed particular emphasis on “ensuring that key development needs are appropriately reflected in the upcoming Federal Budget.”
The session was attended by Special Adviser to the Prime Minister Tariq Bajwa, the Adviser to the Chief Minister of Khyber Pakhtunkhwa on Finance, the province’s Chief Secretary, the Federal Finance Secretary and other senior federal and provincial officials.
The consultations come as the government finalizes budget proposals and economic measures for the next financial year.
Earlier on Friday, the finance minister said expanding the tax base remained a key priority in order to reduce the burden on existing taxpayers and improve revenue generation.
Addressing a joint news conference in Islamabad alongside Minister of State for Finance Bilal Azhar Kayani, Aurangzeb said Pakistan’s economy had remained stable despite challenges posed by last year’s floods and ongoing regional tensions.
He said the country had managed these challenges through its own resources and stressed that broadening the tax net was essential for strengthening public finances.
“In order to generate revenue, the expansion of the tax net is inevitable,” the finance minister said.
As part of that effort, the government announced an optional fixed tax scheme for small traders and retailers aimed at simplifying tax compliance and encouraging greater participation in the formal economy.
Providing details of the initiative, Bilal Azhar Kayani said the scheme carries a fixed tax rate of one percent, with any withholding tax already paid adjusted against the final liability.
He said the minimum tax payment under the scheme would be Rs25,000, while businesses with higher turnover would pay tax at one percent of their sales volume.
According to Kayani, the scheme has been introduced following consultations with traders and retailers and will apply to businesses with annual turnover of up to Rs200 million.
He said participants in the scheme would be exempt from using point-of-sale (POS) machines and would not be subject to routine audits under the general tax framework.
“Retailers and small traders under the fixed tax scheme will be exempt from general audits,” Kayani said, adding that a dedicated committee would address any audit-related concerns.
He said both existing tax filers and non-filers would be eligible to join the scheme, provided qualifying businesses met the prescribed turnover criteria.
Kayani also outlined enforcement measures for businesses that neither register under the fixed tax scheme nor comply with the general tax regime.
He said such entities would face fines of Rs10,000 in the first month, Rs25,000 in the second month and Rs50,000 in the third month.
The proposed measures signal the government's continued focus on expanding documentation of the economy, improving tax compliance and mobilizing domestic resources as it prepares to present its budget strategy for the next fiscal year.
