29/05/2025
📊 Key Highlights of Pakistan’s Proposed Federal Budget 2025–26
By Dawars Associates
As Pakistan prepares to unveil its Federal Budget for the fiscal year 2025–26 in early June, several significant proposals have emerged, aiming to stabilize the economy, broaden the tax base, and meet International Monetary Fund (IMF) requirements. At Dawars Associates, we've analyzed the key points to keep you informed and prepared.Auto Power
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1. 🎯 Tax Relief for Salaried Individuals
The Federal Board of Revenue (FBR) has proposed increasing the annual tax exemption limit for salaried individuals from Rs. 600,000 to potentially Rs. 1,000,000 or Rs. 1,200,000. This move aims to provide much-needed relief to the middle class amid rising inflation. Daily Times+1Daily Pakistan English News+1Daily Pakistan English News
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2. 🚜 Taxation of Agricultural Income
In alignment with IMF recommendations, the government plans to impose income tax on agricultural earnings exceeding Rs. 600,000 annually, effective July 1, 2025. This measure seeks to bring the agriculture sector into the formal tax net. Nation
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3. 🏭 Corporate Tax Reforms
The Overseas Investors Chamber of Commerce and Industry (OICCI) has proposed a phased reduction of the corporate tax rate to 28% in FY2025–26, with a one percent annual cut leading to a 25% rate in five years. This initiative aims to enhance Pakistan's global competitiveness. The Times of India+3Profit by Pakistan Today+3Business Recorder+3
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4. 💼 Simplification of Tax Laws
The Association of Chartered Certified Accountants (ACCA) Pakistan has recommended establishing an independent Tax Law Simplification Commission. This body would work towards creating a more transparent, predictable, and inclusive tax regime, drawing inspiration from international models. PakScoop+1news.taxationpk.com+1news.taxationpk.com+1PakScoop+1
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5. 🛢️ Increase in Petroleum Levy
The upcoming budget is expected to include a significant increase in the petroleum levy, aiming to boost revenue generation. This move may lead to higher fuel prices, impacting transportation and related sectors. ProPakistaniPakistan Tax
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6. 🛡️ Defense Budget Allocation
Pakistan plans to increase its defense budget by 18%, amounting to over Rs. 2.5 trillion for the 2025–26 fiscal year. This decision reflects the country's heightened security concerns and strategic priorities. Samaa TV+2The Times of India+2The Times of India+2The Times of India
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7. 🏗️ Public Sector Development Program (PSDP) Adjustments
The IMF has recommended that Pakistan gradually phase out federal funding for provincial development projects under the PSDP. Provinces are encouraged to become financially autonomous by raising their own revenues. Nation
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8. 📈 Revenue Targets and Fiscal Deficit
The government aims to set a challenging tax revenue target of Rs. 13 trillion, representing a near 40% increase, to secure IMF support and avert an economic crisis. The budget deficit is projected at 6.9% of GDP, with a primary surplus of 1%. Reuters+1The News International+1The News International
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9. 🏘️ Real Estate Sector Reforms
Proposals include removing withholding tax on property dealings and scrapping federal excise duty on property sales. These measures are designed to stimulate the real estate sector and boost economic activity. PhotoNews Pakistan
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10. 📅 Budget Presentation Timeline
The Federal Budget 2025–26 is set to be presented in the first week of June 2025. Following its presentation in Parliament, detailed discussions and debates will take place, with the budget expected to be approved by the end of June. The Express Tribune+3voicepakistan.pk+3Auto Power+3
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📞 Need Expert Guidance?
At Dawars Associates, we are committed to helping you navigate the complexities of the new budget. Whether you're an individual taxpayer or a business entity, our team is here to provide personalized advice and support.
📧 Email: [email protected]
📞 Call/WhatsApp: 0333-5191977
🌐 Website: www.dawarsassociates.com
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Stay tuned for our upcoming 5-minute video summarizing these key budget highlights, available soon on our YouTube channel.
