KARACHI: The Federal Budget for 2026-27, as assessed by Mian Zahid Hussain, presents a balanced approach towards Pakistan's current economic scenario, while also posing significant challenges, particularly with the ambitious tax collection targets set for the Federal Board of Revenue (FBR).
According to Pakistan Businessmen and Intellectuals Forum, the budget outlines a total expenditure of Rs 18.77 trillion, with the FBR tasked to raise Rs 15.264 trillion, marking an increase from the previous year's target of Rs 13 trillion. This increase demands the FBR to collect an additional Rs 2.264 trillion through tax adjustments and enforcement, which may impact the business community. Despite positive economic indicators, concerns remain regarding the growth rate target of four percent, with a five percent growth deemed necessary for employment and poverty alleviation. The budget also includes modifications such as an increase in the minimum tax for the export sector and maintains the tax structure for the IT sector, aiming to enhance digital economy contributions.
The budget introduces reforms in the super tax system, providing relief to corporate entities, and aims to save Rs 3.7 trillion in the energy sector through negotiations with Independent Power Producers. Defense spending has been raised to Rs 3 trillion, while Rs 838 billion is allocated to the Benazir Income Support Program for social protection. However, the Rs 8.054 trillion allocation for interest payments highlights the increasing debt burden. Non-tax revenue measures, such as the Rs 1.67 trillion petroleum levy, are expected to drive inflation, though reductions in electricity and gas tariffs are anticipated to boost export competitiveness.
The budget also proposes a concessionary bank loan rate for exporters, and infrastructure investments, particularly the Quetta to Karachi N-25 highway, aim to enhance trade connectivity. Adjustments in income tax slabs and a new minimum wage of Rs 40,700 offer relief to the public. Mian Zahid Hussain expresses optimism that these measures, with private sector involvement and effective policy implementation, will foster economic stability and attract foreign investment.