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Rs17 Trillion Federal Budget to Be Presented Today; Salary Hikes and Rs15.2 Trillion Tax Target Expected
The federal government will present its Rs17 trillion budget for FY 2026–27 in the National Assembly at 3:00 PM today, following a cabinet briefing by Finance Minister Muhammad Aurangzeb. While debt servicing takes up Rs7.824 trillion and defense climbs to Rs3 trillion, the budget offers a Rs50 billion tax relief package for the salaried class alongside new taxes on imported EVs and cryptocurrency trading.
ND
by News Desk
2026-06-12
Rs17 Trillion Federal Budget to Be Presented Today; Salary Hikes and Rs15.2 Trillion Tax Target Expected

Detailed Report

  • The Budget Presentation: The federal government is all set to present a massive Rs17 trillion (Rs17,000 billion) national budget for the upcoming fiscal year (FY 2026–27) in the National Assembly today, Friday, June 12, 2026. The formal parliamentary session is scheduled to commence at 3:00 PM. Prior to the presentation, Prime Minister Shehbaz Sharif will chair a special federal cabinet meeting at 2:30 PM at Parliament House to accord formal executive approval to the budgetary proposals, where Finance Minister Muhammad Aurangzeb will brief the cabinet.

  • Heavy Debt and Defense Allocations: Highlighting the country's severe fiscal constraints, nearly half of the entire budget volume—Rs7.824 trillion—is expected to be swallowed by domestic and foreign debt servicing (interest payments). Concurrently, the state plans to allocate approximately Rs3 trillion for defense expenditures. On the revenue collection front, the government has devised an aggressive blueprint to pull in Rs1.727 trillion through the petroleum levy alone, while the overall Federal Board of Revenue (FBR) tax target is projected at a historic Rs15.267 trillion.

Salaried Class Relief and New Tax Slabs: In a significant move for middle-income earners, the federal government is considering a Rs50 billion tax relief package for the salaried class. Under this proposal, the number of income tax slabs will expand from 6 to 8. The revised monthly income tax proposals under consideration include:

  • Up to Rs467,000 monthly income: Proposed 29% tax rate.

  • Up to Rs583,000 monthly income: Proposed 32% tax rate.

  • Above Rs583,000 monthly income: Retaining the maximum 35% tax rate (also applicable to annual incomes exceeding Rs7 million).

  • Sovereign Surcharge: The existing tax surcharge on individuals earning over Rs10 million annually may be completely abolished, while the Super Tax on high-earning corporations is proposed to be cut by 1% to 2%.

  • Trade Targets and Sectoral Tax Changes: The macroeconomic framework for the next fiscal year fixes the national export target at $32.8 billion, while annual imports are projected to reach $70 billion, yielding a substantial trade deficit. To preserve fiscal space, the government has decided not to launch any new development projects across public sectors, strictly exempting only the Ministry of Defense and the Ministry of Interior. In terms of market regulations:

    • Unchanged sectors: No changes will be made to existing taxes on solar panels, stationery items, or stock market transactions.

    • Automotive shifts: The sales tax on imported Electric Vehicles (EVs) is likely to jump up to 25%, while the current tax structures for Hybrid Vehicles will be maintained.

    • Digital Assets: To broaden the tax net, the government is introducing a capital gains tax on profits derived from cryptocurrency trading.

  • Consumer Impact and Exemptions: The upcoming budget is expected to heavily impact consumer kitchen budgets, as several essential food items are set to become costlier. Dozens of commodities—including infant formula milk, ghee, and cooking oil—are expected to face higher tax rates. Additionally, the government is planning to withdraw long-standing tax exemptions previously granted to the erstwhile tribal areas (FATA/PATA). Conversely, public sector employees can expect some relief as proposals include mandatory salary and pension increases to offset inflationary pressures.

Federal Budget FY 2026–27 Key Projections Matrix

Budgetary Parameter / Sector Proposed Allocation / Target (PKR) Strategic Focus & Policy Shifts
Total Outlay Rs17,000 Billion (Rs17 Trillion) Baseline federal expenditure framework.
Debt Servicing (Interest) Rs7,824 Billion Largest single expenditure; highlights fiscal burden.
FBR Tax Revenue Target Rs15,267 Billion Focused on widening the net via crypto and imports.
Defense Allocation Rs3,000 Billion Exempted from the baseline development freeze.
Petroleum Levy Target Rs1,727 Billion Primary non-tax revenue generation tool.
Import / Export Targets $70 Billion / $32.8 Billion Projected trade metrics for the upcoming fiscal year.
Salaried Relief Fund Rs50 Billion Restructuring of tax brackets into 8 distinct income slabs.

Short Caption

The federal government will present its Rs17 trillion budget for FY 2026–27 in the National Assembly at 3:00 PM today, following a cabinet briefing by Finance Minister Muhammad Aurangzeb. While debt servicing takes up Rs7.824 trillion and defense climbs to Rs3 trillion, the budget offers a Rs50 billion tax relief package for the salaried class alongside new taxes on imported EVs and cryptocurrency trading.
Tagged:

#PakistanBudget2026 #FederalBudget2026 #MuhammadAurangzeb #IncomeTaxRelief #DebtServicing #CryptoTax #FBRTargets #BreakingNewsPakistan
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