Finance Minister Muhammad Aurangzeb on Friday presented the Federal Budget 2026-27 with a total outlay of Rs18.771 trillion, as the government seeks to steer the economy through a challenging environment marked by energy constraints, external pressures, and geopolitical uncertainty in the Middle East.
Delivering the budget speech, the finance minister announced a series of proposed tax relief measures aimed at stimulating investment activity in the property sector.
He said the withholding tax on the purchase of property by filers is proposed to be reduced from 2.5 percent to 1.5 percent, while the tax on property sales is proposed to be lowered from 5.5 percent to 2.75 percent.
The government stated that the measures are intended to revive real estate activity and encourage documented investment flows within the sector.
Turning to the information technology sector, the finance minister described the digital economy as one of the fastest-growing segments of Pakistan’s economy.
He noted that exports of IT and IT-enabled services have reached $3.8 billion and are projected to approach $4.5 billion by the end of the current fiscal year, reflecting sustained growth in the sector.
To maintain this momentum, the government has proposed extending the concessional Final Tax Regime (FTR) rate of 0.25 percent for IT companies for an additional three years, until June 30, 2029. Officials said the extension aims to support export competitiveness and provide stability to the sector’s tax framework.
In addition to sector-specific measures, the federal government has proposed a 7 percent increase in salaries for public sector employees in the upcoming fiscal year budget.
The proposal also includes a 7 percent increase in pensions for retired government employees, aimed at providing relief to pensioners amid ongoing inflationary pressures.
Furthermore, the government has suggested a 10 percent increase in the national minimum wage, as part of broader efforts to support low-income workers and strengthen household purchasing power.
The budget, with its Rs18.771 trillion outlay, reflects a mix of fiscal consolidation efforts and targeted relief measures across key segments of the economy, as policymakers attempt to balance growth priorities with macroeconomic stability.
