ISLAMABAD: Finance Minister Muhammad Aurangzeb on Monday hailed the Rs17.57 trillion FY2025–26 budget as a balanced plan focused on public relief, industrial growth, and fair taxation. Speaking in the National Assembly, he outlined measures to protect vulnerable groups while targeting high-income segments.
Tax Relief for Salaried Class, Pensioners
Aurangzeb announced a reduced income tax rate of 1% for salaries between Rs0.6 million and Rs1.2 million, down from 2.5%. Pensioners earning over Rs10 million will face taxes, but those above 75 are exempt. No tax will apply on pension commutation or gratuity, easing concerns for retirees.
Support for Solar Energy, Agriculture
The proposed 18% sales tax on imported solar panel components was cut to 10%, affecting only 46% of items, leading to a 4.6% price hike. To support local farmers, a sales tax on imported cotton and yarn aims to balance market prices. Aurangzeb condemned hoarding, promising strict action.
Boost for Exports, Social Welfare
Export-oriented industries remain largely tax-exempt to stay competitive globally. The Benazir Income Support Programme’s budget rose to Rs716 billion, aiding over 10 million families. A collateral-free loan scheme for small farmers and a 20-year housing loan plan for low-income groups were also introduced.
Economic Stability Amid Regional Tensions
Aurangzeb warned of economic risks from Iran-Israel tensions, with a high-level committee monitoring impacts. He emphasized documenting the economy to reduce informality and boost exports, alongside policies for industry, construction, and eco-friendly measures.
