ISLAMABAD: Pakistan has unveiled its federal budget for the fiscal year 2025–26, totaling Rs17.6 trillion, aiming to achieve a 4.2% GDP growth and a fiscal deficit of 3.9% of GDP.
The budget outlines a primary surplus of 2.4% of GDP, aligning with International Monetary Fund (IMF) targets under a $7 billion aid program.
The Federal Board of Revenue (FBR) is tasked with collecting Rs14.13 trillion, marking a 9% increase from the previous year.
The government has introduced new taxes totaling Rs463 billion, including an 18% sales tax on solar panels and online businesses, and a 5% tax on foreign vendors from countries without bilateral tax agreements with Pakistan.
Defense expenditure has been increased by 20% to $12 billion, including pensions, following recent tensions with neighboring India.
The Public Sector Development Programme (PSDP) allocation stands at Rs1 trillion, focusing on infrastructure and development projects.
Despite ambitious targets, analysts express skepticism about achieving the projected 4.2% growth, citing challenges in private investment and past underperformance in key sectors.
The budget’s success hinges on effective implementation of tax reforms and expenditure management.
