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đź“… Budget Overview
Pakistan’s Federal Budget 2025–2026 was presented in the National Assembly on June 10, 2025. With a total outlay of Rs. 17.6 trillion, this blueprint is designed to promote economic growth, implement broad-based tax reforms, and drive digital transformation. Aligned with IMF guidelines, it provides relief for everyday Pakistanis while enforcing fiscal discipline.
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📊 Ambitious Economic Targets
The government has laid out aggressive economic goals for FY26:
- GDP Growth Target: 4.2% (up from 2.7% in FY25)
- Tax-to-GDP Ratio: Increase from 10% to 14%
- Revenue Goal: Rs. 14.13 trillion via FBR
- Non-Tax Revenue: Rs. 5.15 trillion
Keyword Targets: Federal Budget 2025–26 Pakistan, GDP growth Pakistan, FBR revenue target, Tax-to-GDP ratio
đź’Ľ Tax Reforms to Widen the Net
Aimed at building a fair and transparent tax system:
- New Taxes Introduced: Rs. 623+ billion on digital transactions, agriculture, freelancing
- Non-Filer Restrictions: Can’t buy vehicles, properties, or open normal bank accounts
- E-Commerce Withholding Tax: 0.25%–2% on online sales collected by banks and couriers
- Property Taxes: Filers: 1.5–2.5%; Non-filers: up to 18.5% purchase & 11.5% sale
- Capital Gains & Dividends: Increased to up to 25% for debt-based mutual funds and stocks
👨‍💼 Relief for Salaried Class
The budget provides much-needed income tax relief in Pakistan:
- Incomes up to Rs. 600,000: Zero tax
- Rs. 600,001 – 1.2M: 1% (reduced from 5%)
- Rs. 1.2M – 2.2M: 11%
- Rs. 2.2M – 3.2M: 23%
- Surcharge Relief: For incomes above Rs. 10M, reduced from 10% to 9%
Other benefits:
- 10% salary hike for government employees
- 7% pension increase
- 25% tax rebate for teachers and researchers (restored till June 30, 2025)
- Tax credit on home loans up to 2,500 sq. ft.
đź’¸ Sectoral Spending & Fiscal Discipline
The budget aligns infrastructure growth with financial responsibility:
- Defense Allocation: Rs. 2.55 trillion (20% increase)
- Development Budget: Rs. 1 trillion for Public Sector Development Program
- Debt Servicing: Rs. 8.2 trillion (47% of expenditure)
- Austerity: Rs. 1,300 billion saved through lower State Bank rates
đź’» Embracing Technology & Digital Governance
The Finance Act 2025–26 focuses on modernizing tax systems and boosting compliance:
- AI-Powered Tax Systems: Improve transparency and tracking
- Recognition of Digital Payments: For loans, gifts, and investments
- Real-Time Cargo Tracking
- Tax Exemptions for SEZs and STZs valid till 2035 or for 10 years
đź›’ Sales Tax & E-Commerce Measures
Sales tax enforcement has been enhanced, especially in the digital commerce sector:
- Online Orders: Tax collected by gateways & courier services
- Solar Panels: Exemption withdrawn
- Tribal Areas: Gradual increase to 16% by 2028–29
- Imported Goods: Retail price set at 130% of customs value
- Locally Made Cars (under 850cc): Tax increased from 12.5% to 18%
đź“‘ Additional Compliance Measures
- Pensions over Rs. 10M (Under 70): Taxed at 5%
- Withholding Tax: 15% on services, 20% on profits from debt
- Cash Transactions: Over Rs. 200,000 disallowed for deductions
- NTN Enforcement: 10% of purchases from non-NTN holders disallowed
- Simplified Appeals: Direct filing to Appellate Tribunal bypassing Commissioner
⚖️ Legal Help for Budget 2025–26
At Qadri Law Chambers, we help individuals and businesses navigate:
- Tax law & filing under new slabs
- Property & real estate tax advisory
- Freelancing & digital transaction taxation
- Salary, pension, and compliance legal consultation
👉 Learn more about us or get in touch
📉 Challenges and Future Outlook
While Federal Budget 2025–26 gives a breather to the salaried class and expands digital taxation, new taxes on fuel and online services may pressure households. Inflation, rising debt, and global uncertainty remain major hurdles.
Still, this Rs. 17.6 trillion financial plan could mark a turning point for a more resilient, tech-driven, and accountable Pakistan.
External Resources for Further Reading
For additional insights and official documents related to the Federal Budget 2025–26, you can explore the following trusted sources:
- 🔹 Federal Board of Revenue (FBR) – Official Tax Updates
Access the latest tax rates, filing requirements, and fiscal policies. - 🔹 Ministry of Finance – Pakistan Budget Documents 2025–26
Download the full budget speech, economic survey, and sectoral allocations. - 🔹 IMF – Pakistan Country Page
Learn how IMF guidelines influenced Pakistan’s economic framework. - 🔹 State Bank of Pakistan (SBP) – Policy and Rates
Explore monetary policy, interest rate changes, and inflation trends. - 🔹 Dawn News – Budget 2025–26 Special Coverage
Read local news, expert opinions, and public reactions to the federal budget.
📝 Need legal help interpreting how this budget affects your finances or business?
📞 Contact Qadri Law Chambers for expert legal advice.