Finance Bill 2025 Approved by Parliament, Federal Budget of Rs17.57 Trillion Unveiled

Strategic Insights -

Pakistan's parliament has approved the Finance Bill 2025, greenlighting the Rs17.57 trillion federal budget for the next fiscal year. The budget has been welcomed by key opposition party PPP, which has pledged to support the government's proposals, including an increase in the budget for the Benazir Income Support Programme (BISP). The finance minister's amendments to the Income Tax Ordinance, 2001, and Sales Tax Act, 1990, were approved, while opposition amendments were rejected.

Key Takeaways:

  • The Finance Bill 2025 has been approved by parliament, greenlighting the Rs17.57 trillion federal budget for the next fiscal year.
  • The PPP has pledged to support the government's proposals, including an increase in the budget for BISP and tax exemptions for certain institutions.
  • The finance minister's amendments to the Income Tax Ordinance, 2001, and Sales Tax Act, 1990, were approved, while opposition amendments were rejected.
  • The federal budget for fiscal year 2026 has a total outlay of Rs17.573 trillion, representing a 6.9% decrease from the previous year.
  • Current expenditure in the FY26 budget is proposed at Rs16,286bn, a 5.33% decrease from the previous year.
  • The pensions of former presidents and their widows will be exempt from tax under the amended ordinance.
  • 107 institutions, including lawyers' bodies, hospitals, and government projects, have been granted tax-exempt status as part of amendments to the Income Tax Ordinance, 2001.
  • The amendments to the Salaries and Allowances Act grant ministers and ministers of state the same salary as members of parliament.

Statistics:

  • Rs17.57 trillion: total federal budget for the next fiscal year, approved by parliament.
  • Rs16,286bn: proposed current expenditure in the FY26 budget.
  • 6.9%: decrease in the total outlay from the previous year's budget.
  • 5.33%: decrease in current expenditure from the previous year's budget.
  • 107: number of institutions granted tax-exempt status under the amended ordinance.

Sources:

  • Dawn.com, "Finance Bill 2025 approved by parliament"
  • Dawn.com, "Finance Minister Muhammad Aurangzeb's amendments to various legislation"
  • Dawn.com, "Opposition's amendments rejected in National Assembly"
  • Dawn.com, "Aurangzeb unveils Pakistan's annual federal budget in charged National Assembly session"