ISLAMABAD – Finance Minister Muhammad Aurangzeb presented the federal budget for 2026-27 with a total outlay of Rs18,771 billion. The budget includes several tax relief measures aimed at supporting the Property Sector, exporters, and the information technology industry.
One of the key announcements focuses on the Property Sector, which has faced slow growth in recent years. The government reduced withholding tax rates on property transactions for tax filers. Officials believe these changes will encourage more activity in the real estate market.
Under the new policy, withholding tax on property purchases for filers has been reduced from 2.5 percent to 1.25 percent. Similarly, the tax on property sales for filers has been cut from 5.5 percent to 2.75 percent. These reductions are expected to lower transaction costs and make buying and selling property more affordable.
The government hopes the relief package will help revive the Property Sector and increase investment in real estate. Market analysts will closely monitor whether the measures lead to stronger demand and higher transaction volumes during the next fiscal year.
The budget also includes tax relief for exporters. The advance income tax rate on export proceeds has been lowered from 2 percent to 1.2 percent. Officials say the reduction will improve cash flow for exporters and strengthen Pakistan’s export sector.
In another important decision, the government extended the Final Tax Regime exemption on IT export income until June 2029. The move is intended to provide stability and long-term policy support for the technology industry.
The budget also abolished the super tax on incomes between Rs15 crore and Rs25 crore. The removal of this tax is expected to benefit higher-income earners and reduce their overall tax burden.
Despite these relief measures, the government faces significant financial challenges. Current expenditure has been estimated at Rs17,495 billion. Interest payments remain the largest expense, reaching Rs8,054 billion, which is nearly half of the total budget.
Other major allocations include Rs3,000 billion for defence, Rs1,169 billion for pensions, Rs1,071 billion for civil government operations, and Rs1,091 billion for subsidies. Emergency and contingency funds have been allocated Rs430 billion.
The federal development budget stands at Rs1,050 billion and will support infrastructure and development projects across the country.
To finance spending, the Federal Board of Revenue has been assigned a tax collection target of Rs15,264 billion. Economists believe achieving this target may require stronger enforcement and a broader tax base.
In other news read more about Pakistan Raises Minimum Wage to Rs40,700 in Budget 2026-27
The Budget 2026-27 reflects the government’s effort to stimulate the Property Sector, support exports, and maintain fiscal stability while managing rising debt servicing costs.
