Asfandyar Yahya

Every month, households decide what matters most when money runs short; food first, then bills, then everything else. Governments do the same thing, just at a much larger scale.&nbsp; This explainer breaks down what a national budget actually is, why countries cannot simply plan five years ahead, and why a budget is ultimately less about numbers and more about priorities.&nbsp;

Tell Me Why

Every month, households decide what matters most when money runs short; food first, then bills, then everything else. Governments do the same thing, just at a much larger scale. 


Tell Me Why: We have a budget

Web Desk

ISLAMABAD: Pakistan&#39;s federal budget 2026-27 has introduced a series of new initiatives aimed at accelerating investment, promoting technological advancement, strengthening state institutions, and creating employment opportunities.&nbsp; Alongside relief measures for salaried employees and pensioners, the government has allocated billions of rupees to the projects, designed to modernize the economy and lay the foundation for long-term growth. Investment-led growth strategyA key pillar of the budget is the continued strengthening of the Special Investment Facilitation Council (SIFC), which serves as a one-window platform for domestic and foreign investors.&nbsp; A sum of Rs354.4 million has been allocated for the council&#39;s operational expenses and Rs479.7 million for development projects. The SIFC is expected to facilitate major investments in mining, agriculture, energy, infrastructure, and information technology, the sectors that have the potential to generate significant economic activity and employment over the coming years. Affordable housingAmong the notable new initiatives announced in budget 2026-27 is a plan to construct 150,000 affordable and climate-resilient housing units in collaboration with federal and provincial governments.&nbsp; The initiative aims to address Pakistan&#39;s housing shortage while promoting environmentally sustainable construction practices.&nbsp; The project will focus on providing low-cost housing to deserving families, incorporating climate-resilient designs that can better withstand extreme weather events such as floods and heatwaves.&nbsp; The scheme is expected to improve living conditions for thousands of households while supporting the government&#39;s broader goals of social welfare and climate adaptation. Technology and artificial intelligenceThe government plans to expand support for Pakistan&#39;s digital economy through increased funding for technology-related initiatives.&nbsp; The Special Technology Zones Authority (STZA) has been allocated Rs952.5 million for operational expenditures and Rs 563.8 million for development activities. The funding will support technology parks, startup ecosystems, innovation centers, and projects linked to Artificial Intelligence, digital transformation, and IT exports.&nbsp; The finance bill 2026-27 also introduces measures aimed at documenting e-commerce activities and expanding the country&#39;s digital economy. Space, science and innovationPakistan&#39;s space sector receives a notable boost in the new budget.&nbsp; An amount of approximately Rs4.895 billion has been earmarked for development projects of the Space and Upper Atmosphere Research Commission (SUPARCO). The funding is supposed to support satellite development, remote sensing projects, scientific research, and advanced technological capabilities that could help strengthen Pakistan&#39;s knowledge economy. Climate resilience and environmental protectionRecognizing the challenges posed by climate change, the government proposed increased allocations for the Ministry of Climate Change and Environmental Coordination to support environmental protection, disaster preparedness, and climate adaptation initiatives. Meanwhile, the Cannabis Control and Regulatory Authority has been allocated Rs250.2 million to regulate Pakistan&#39;s emerging medicinal and industrial cannabis sector, which policymakers view as a potential export-oriented industry. Institutional reforms and digital governanceThe budget also allocates Rs6.05 billion for the newly established Federal Constitutional Court, marking one of the most significant institutional developments in recent years. In addition, the Finance Bill introduces measures to digitize tax administration through expanded e-invoicing systems, enhanced taxpayer databases, real-time monitoring mechanisms, and stronger enforcement against tax evasion. New jobsWhile the government has not announced an official employment target for FY 2026-27, many of the budget&#39;s initiatives are expected to support job creation. Investments facilitated through the SIFC, expansion of Special Technology Zones, growth in the IT sector, mineral development projects, infrastructure schemes, and agricultural modernization programs are expected to generate thousands of direct and indirect employment opportunities. Large mining projects, technology parks, infrastructure investments, and PSDP-funded development schemes have historically supported substantial employment during both construction and operational phases.&nbsp; The planned construction of 150,000 affordable homes is also expected to become a significant source of employment.&nbsp; Large-scale housing projects typically create jobs across a wide range of sectors, including construction, engineering, architecture, transportation, cement, steel, bricks, electrical equipment, plumbing, and other building materials industries.&nbsp; A project of this scale could support tens of thousands of direct and indirect jobs during both the construction and supply-chain phases.&nbsp; The initiative is therefore expected to contribute not only to housing provision but also to economic activity and employment growth across the country. Although no consolidated estimate has been provided in the budget documents, these initiatives could support several hundred thousand direct and indirect jobs over the medium term. Overall, budget 2026-27 reflects the government&#39;s strategy of combining investment promotion, technology-led growth, institutional reform, and economic documentation to strengthen Pakistan&#39;s economy and create opportunities for future generations.

Economy

The new budget unveils major initiatives focused on investment, technology, affordable housing, climate resilience, and digital governance, with billions allocated to SIFC, IT, space and infrastructure; projects expected to create thousands of jobs and drive long-term economic growth.

Budget 2026-27: Investment, technology, jobs take center stage

Shaharyar Khalid

Pakistan&#39;s proposed 2026-27 budget includes increased spending on social welfare, healthcare, education and housing, reflecting the government&#39;s focus on public welfare. The budget allocates Rs838 billion to the Benazir Income Support Programme (BISP), Rs71 billion to the Prime Minister&#39;s Housing Scheme and Rs25.1 billion for health sector projects. It also sets aside Rs22 billion for Daanish Schools, Rs26.3 billion for broader education initiatives and nearly Rs8 billion for youth skills development programmes. The government says the measures are aimed at strengthening social protection and supporting human development across the country.

Shorts

Pakistan's proposed 2026-27 budget includes increased spending on social welfare, healthcare, education and housing, reflecting the government's focus on public welfare.

Pakistan boosts safety net as budget expands social spending

Simran Siraj

Pakistan&#39;s new budget proposes removing taxes on sanitary pads, tampons, and contraceptives, aiming to make menstrual and reproductive health products more affordable. The measure still needs parliamentary approval.

Pakistan's new budget proposes removing taxes on sanitary pads, tampons, and contraceptives, aiming to make menstrual and reproductive health products more affordable. The measure still needs parliamentary approval.

Pakistan budget proposes ending taxes on sanitary pads, tampons

ISLAMABAD: Pakistan&#39;s proposed federal budget for fiscal year 2026-27 was presented in the National Assembly on Friday, outlining a range of tax relief measures, welfare initiatives and investment incentives aimed at supporting households, businesses and economic growth. Detailed coverage of the proposed budget, including key allocations and policy measures, is available on Pakistan TV Digital. Below, we examine how the budget proposals could affect ordinary Pakistanis and highlight the relief measures, incentives and facilities the government plans to introduce in the upcoming fiscal year, subject to parliamentary approval. <ul style="list-style-type: square;"><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">7% increase in salaries of government employees,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">7% increase in the pension of retired government servants,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">10% increase in minimum wages is proposed in the budget,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Reduction in taxes on salaries. Details in the table,</li></ul><table style="margin-left: 0.5in; border-collapse: collapse; border-width: medium; border-style: none; border-color: currentcolor; border-image: initial; width: 66%; margin-right: calc(30%);"><tbody><tr><td style="width: 35.3627%; border: 1pt solid windowtext; padding: 0in 5.4pt; vertical-align: top; text-align: center;">Annual Salary Range (Rs in lakhs)</td><td style="width: 36.7876%; border-width: 1pt 1pt 1pt medium; border-style: solid solid solid none; border-color: windowtext windowtext windowtext currentcolor; border-image: initial; padding: 0in 5.4pt; vertical-align: top; text-align: center;">Previous Tax&nbsp;(%)</td><td style="width: 27.7688%; border-width: 1pt 1pt 1pt medium; border-style: solid solid solid none; border-color: windowtext windowtext windowtext currentcolor; border-image: initial; padding: 0in 5.4pt; vertical-align: top; text-align: center;">New Tax&nbsp;(%)</td></tr><tr><td style="width: 35.3627%; border-width: medium 1pt 1pt; border-style: none solid solid; border-color: currentcolor windowtext windowtext; border-image: initial; padding: 0in 5.4pt; vertical-align: top; text-align: center;">22-32</td><td style="width: 36.7876%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor windowtext windowtext currentcolor; padding: 0in 5.4pt; vertical-align: top; text-align: center;">23&nbsp;</td><td style="width: 27.7688%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor windowtext windowtext currentcolor; padding: 0in 5.4pt; vertical-align: top; text-align: center;">20</td></tr><tr><td style="width: 35.3627%; border-width: medium 1pt 1pt; border-style: none solid solid; border-color: currentcolor windowtext windowtext; border-image: initial; padding: 0in 5.4pt; vertical-align: top; text-align: center;">32-41</td><td style="width: 36.7876%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor windowtext windowtext currentcolor; padding: 0in 5.4pt; vertical-align: top; text-align: center;">30</td><td style="width: 27.7688%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor windowtext windowtext currentcolor; padding: 0in 5.4pt; vertical-align: top; text-align: center;">25</td></tr><tr><td style="width: 35.3627%; border-width: medium 1pt 1pt; border-style: none solid solid; border-color: currentcolor windowtext windowtext; border-image: initial; padding: 0in 5.4pt; vertical-align: top; text-align: center;">41-56</td><td style="width: 36.7876%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor windowtext windowtext currentcolor; padding: 0in 5.4pt; vertical-align: top; text-align: center;">35</td><td style="width: 27.7688%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor windowtext windowtext currentcolor; padding: 0in 5.4pt; vertical-align: top; text-align: center;">29</td></tr><tr><td style="width: 35.3627%; border-width: medium 1pt 1pt; border-style: none solid solid; border-color: currentcolor windowtext windowtext; border-image: initial; padding: 0in 5.4pt; vertical-align: top; text-align: center;">56-70</td><td style="width: 36.7876%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor windowtext windowtext currentcolor; padding: 0in 5.4pt; vertical-align: top; text-align: center;">35</td><td style="width: 27.7688%; border-width: medium 1pt 1pt medium; border-style: none solid solid none; border-color: currentcolor windowtext windowtext currentcolor; padding: 0in 5.4pt; vertical-align: top; text-align: center;">32</td></tr></tbody></table> <ul class="decimal_type" style="list-style-type: disc;"><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Abolition of surcharge on salaries,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Significant reduction in customs duty, additional customs duty and regulatory duty on a variety of raw materials and related items. This will benefit exports, chemical sector, Small and Medium Enterprises (SMEs),</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Complete abolition of customs duty on the raw materials of more than 100 locally manufactured cancer and other medicines,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Concessions on electric motorcycles, auto-rahkhaws, cars and buses will continue,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">One percent sales tax on imported electric trucks is proposed,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Withholding Tax on the transfer of properties is being reduced from 2.5% to 1.25% on purchase and from 5.5% to 2.75% on sales.</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">One to 7.5% tax on all the 6 slabs of business income, ranging from Rs 150-500 million, is being abolished,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Abolition of Federal Excise Duty (FED) on foreign air travel in business class,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Real-time Production Monitoring Program to gauge exact revenue potential of industrial units and Digital Invoicing Network for transparency in supply chain will be retained during the next fiscal year to enhance revenue.</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">An automatic mechanism is being introduced to pinpoint discrepancies between the data provided by the taxpayer and the data available with the FBR through different means. This will reduce expenses, delay and botheration to the taxpayers caused in conventional system,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Abolition of all kind of taxes on contraceptives,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Abolition of all kind of taxes on sanitary pads,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Abolition of Capital Value Tax on foreign assets,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Withholding Tax on the use of credit and debit cards of Pakistani banks on foreign lands is being reduced to 0.5%,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Advance Income Tax and Minimum Tax on exports are being reduced to 1.25%,</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Concession of 0.25% FTR (Final Tax Regime) is to expire on June 30, 2026. This concession is being further extended for 3 years (till June 30, 2029),</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">A total of Rs 144.9 billion developmental budget has been earmarked for the merged tribal districts of Khyber Pakhtunkhwa, AJK and GB. This includes Rs 45 billion for AJK, Rs 56 billion for the merged districts of Khyber Pakhtunkhwa, and Rs 5 billion and Rs 4 billion for AJK and GB, respectively.</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">Construction of 150000 cheap and climate resistant on the federal and provincial levels and</li><li style="font-family: Arial, Helvetica, sans-serif; font-size: 18px; color: rgb(0, 0, 0); line-height: 2;">12 million families will be covered under the BISP.</li></ul>

From tax relief and salary increases to housing, health and welfare spending, Pakistan's proposed budget contains a range of measures that could affect households, workers, businesses and investors in the coming fiscal year.

Articles tagged with "Budget 2026-27"

Tell Me Why: We have a budget

Budget 2026-27: Investment, technology, jobs take center stage

Pakistan boosts safety net as budget expands social spending

Pakistan budget proposes ending taxes on sanitary pads, tampons

Pakistan budget 2026-27: Key relief measures for everyday citizens

Tell Me Why: We have a budget