Federal budget FY26 to offer tax relief for salaried class

May 26, 2025 (MLN): The forthcoming federal budget, scheduled for June 10, will include tax concessions aimed at reducing the financial strain on salaried individuals, said Finance Minister Muhammad Aurangzeb.

He added that the government is actively working to ease the tax burden on salaried persons, noting that their income is taxed as soon as it is credited to their accounts.

He stressed the need for a strategic direction in the budget, not just a statement of income and expenditure.

"We are taking bold steps in the upcoming budget to show where the economy stands and where it is headed," he said.

Aurangzeb said Pakistan's economic recovery is gaining international recognition, with the speed of improvement surprising observers, as per the press release issued.

He outlined that digitization in the Federal Board of Revenue (FBR) is underway, and reducing human intervention will increase transparency.

The finance minister further noted that reforms are being introduced in the tax system, energy sector, and other areas.

“We have already handed over 24 SOEs to the Privatisation Commission,” he said, adding that the economy is moving towards technological transformation.

The minister shared that during recent meetings with investors in Washington and London, Pakistan received a positive response on its economic outlook.

"The world is satisfied with Pakistan’s macroeconomic stability,” he said, reaffirming the government's commitment to long-term reforms.

He also mentioned the government is working on simplifying the tax filing process for salaried individuals and pushing forward with pension reforms.

Aurangzeb expressed hope that the country’s debt repayment burden will ease and said climate change remains a major challenge, for which necessary reforms are underway.

Measures will also be taken next year to improve the debt management system.

He noted that rightsizing efforts are ongoing in federal government departments.

Later, Aurangzeb said the government will support Pakistan’s armed forces to the fullest extent possible, stressing that national defence is a collective need, not just that of the military.

Addressing the International Monetary Fund (IMF) programme, he revealed there were attempts to derail Pakistan’s case by disrupting the board meeting.

“Efforts were made to delay the meeting and exclude Pakistan’s agenda,” he said. However, the case was discussed on merit, and Pakistan fulfilled all IMF targets.

“If we had failed to meet the targets, we would have faced serious difficulty,” he said.

He confirmed that the implementation of the IMF programme continues, and the IMF mission has already departed after constructive talks. Virtual discussions with the IMF will continue during the current week.

Aurangzeb also clarified that no decision has been made yet regarding adjustments to civil or military salaries.

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