Islamabad, June 26, 2025 – The National Assembly passed the Rs17.57 trillion federal budget for the fiscal year 2025-26 on Thursday, approving the Finance Bill with amendments despite strong opposition from the Pakistan Tehreek-e-Insaf (PTI). The budget, unveiled two weeks ago, aims to balance economic growth with social welfare, incorporating key changes to tax policies and social programs.
Finance Minister Muhammad Aurangzeb presented the Finance Bill, which was approved by a majority vote from the ruling coalition, including the Pakistan Peoples Party (PPP), after a clause-by-clause review. Notable amendments include revisions to the Sales Tax Act 1990, granting the finance committee authority to order arrests for tax fraud exceeding Rs50 million, a shift from an earlier proposal empowering tax commissioners directly. All opposition-proposed amendments to the Sales Tax Act were rejected.
The Finance Bill retains the income tax exemption for salaried individuals earning up to Rs600,000 annually. New tax slabs include a 1% tax for incomes between Rs600,001 and Rs1.2 million, a fixed Rs6,000 tax for incomes between Rs1.2 million and Rs2.2 million, Rs116,000 for Rs2.2 million to Rs3.2 million, and Rs346,000 for Rs3.2 million to Rs4.1 million. Prime Minister Shehbaz Sharif praised the economic team, particularly Aurangzeb, for their efforts and thanked allied parties for their support. The federal cabinet, in a meeting chaired by the PM, also approved forming a committee to address gas policy issues for submission to the Supreme Court.
PPP Chairman Bilawal Bhutto-Zardari commended the government for adopting his party’s proposals, including a 20% increase in the Benazir Income Support Programme (BISP), a 50% reduction in proposed solar panel taxes, and restrictions on the Federal Board of Revenue’s arrest powers to cases involving sales tax fraud post-inquiry. However, Bilawal’s claim of raising the income tax exemption limit to Rs1.2 million contradicts the approved bill, which maintains the Rs600,000 threshold. He emphasized that the budget prioritizes national interest and citizen welfare.
