The National Assembly has approved the federal budget for the upcoming fiscal year 2025-26, passing the Finance Bill 2025 with a majority vote.
Finance Minister Muhammad Aurangzeb presented the bill, which received support from the ruling coalition, including the Pakistan Peoples Party (PPP). The bill was passed after a clause-by-clause reading and the adoption of amendments through voting. All amendments and cut motions suggested by the opposition were rejected during the session.
The total size of the budget is over Rs17.57 trillion, with estimated revenue of Rs19,400 billion. The PPP backed the bill after the government addressed the party’s concerns by lowering the tax on solar panels to 10 percent and increasing the Benazir Income Support Programme (BISP) budget by 20 percent, as demanded by the PPP.
The government has also introduced what it calls a relief measure for salaried individuals. Under the new tax system, those earning up to Rs600,000 a year will not pay any income tax.
Those earning between Rs600,001 and Rs1.2 million annually will pay 1 percent tax on the amount exceeding Rs600,000. For people earning between Rs1.2 million and Rs2.2 million per year, there will be a fixed tax of Rs6,000 plus 11 percent on the amount above Rs1.2 million.
In the next slab, individuals earning between Rs2.2 million and Rs3.2 million will pay a fixed tax of Rs116,000 and 23 percent on the amount exceeding Rs2.2 million.
For those earning between Rs3.2 million and Rs4.1 million annually, the tax includes Rs346,000 plus 30 percent on the amount above Rs3.2 million. People earning more than Rs4.1 million a year will have to pay Rs616,000 along with 35 percent tax on the amount exceeding Rs4.1 million.
