June 13, 2026
By Hafiz ullah Storai Sherani
The federal government’s proposed budget of over Rs 18,771 billion for the fiscal year 2026-2027 has drawn varied reactions from political leaders, highlighting the clash between the government’s stance and the reservations of the opposition and coalition partners.
According to the detailed budget layout, the government has attempted to strike a balance between economic stability, tax incentives, and public relief. Salaries and pensions for government employees are proposed to be increased by 7%, while the GDP growth target has been set at 4%, inflation target at 8.2%, products export target at $32.9 billion, and remittances from overseas Pakistanis at $42.4 billion.
To broaden the tax net and document the economy, income tax rates for salaried individuals earning between Rs 2.2 million to Rs 7 million annually have been reduced. Additionally, withholding tax on property transfers has been rationalized for filers, and sales tax/surcharge on six business slabs earning between Rs 150 million to Rs 500 million has been completely abolished, while the super tax on incomes above Rs 500 million is proposed to be cut from 10% to 8%. Conversely, a 5% withholding tax has been proposed on digital content creators and social media influencers (YouTubers and TikTokers), alongside a 1% fixed tax for small shopkeepers with annual sales up to Rs 200 million under the ‘Fixed Tax Asan Scheme’, and federal excise duty (FED) on luxury vehicles above 2000cc including electronic cigarettes’ e-liquids.
On the other hand, the defense budget has been set at Rs 3,000 billion, marking a 17.6% increase, while the federal government will spend its largest share of Rs 8,005.4 billion on debt servicing and interest payments. The Public Sector Development Programme (PSDP) volume is fixed at Rs 1,000 billion—which includes Rs 100 billion for the Karachi-Quetta Highway, Rs 30 billion for the Sukkur-Hyderabad Motorway, and Rs 21 billion each for the Mohmand and Dasu dams—bringing the total national development budget to Rs 3,675 billion after including the provincial shares. To boost the economy, the tax relief for IT exports has been extended until 2029, and the 18% tax on the shipping industry and the upgrade of oil refineries has been abolished for five years.
For public welfare, the withholding tax on international credit card transactions has been reduced from 5% to 0.5%, the scope of the Benazir Income Support Programme (BISP) is being expanded to 12 million people, and an 18% sales tax on sanitary pads and contraceptives is proposed to be completely removed for women’s health. Overall, the FBR has been tasked with a tax collection target of Rs 15,264 billion, to be achieved through monitoring and adjustments rather than imposing new taxes.
Regarding this budget, Prime Minister Shehbaz Sharif announced, “We achieved economic stability, and as a result, we provided relief to the public in the budget today. After a difficult period, the improvement and relief that I promised you, and the relief that my nation genuinely deserves, has formally begun. The fundamental objective of this budget is that the fruits of economic strength directly reach the public and every segment becomes part of this progress.”
On the other hand, Member of National Assembly (MNA) from Pakistan Tehreek-i-Insaaf (PTI), Barrister Gohar Ali Khan, rejected the budget.
“This is not a budget that gives relief to the poor,” he spoke to Voicepk. “A budget that cannot reduce inflation for the poor, that cannot provide medicine to the poor, that cannot give relief to the poor, where the common man cannot forsee his bills being paid with ease after the budget is annoucned, whether his living cost will decrease, I cannot call such a budget a poor man’s budget.”
MQM MNA, Farooq Sattar, while representing Karachi, highlighted the increasing poverty.
“PML-N, and PPP have all said the exact same things when they have been in the opposition. Today, when these parties are in the government, they forget their promises,” he said. “But by abolishing the levy tax, those who use car taxi services like Bykea, or delivery services like Foodpanda, and those who use transport like rickshaws, motorcycles, mini-buses, and buses, they are expected to get relief, as transport fares will decrease, electricity production will become cheaper, and the cost of doing business – the cost of every type of trade, business, and work will decrease,” he said. “People will work, progress, and earn. And when they earn, take tax on their earnings and income. The burden on people is increasing, their capacity to earn is decreasing, thanks to the cost of electricity, gas, and oil, the 17% sales tax rate, and the petroleum levy. Let them stand on their feet, let them earn. When they earn, then, God willing, these issues will also be resolved.”
Nawabzada Jamal Khan Raisani, a PPP Member of the National Assembly from Balochistan, did not appear completely satisfied with the budget either, as according to him, the people of Balochistan were not given the consideration they deserve.
“I believe that any budget that is made is not successful until the public gets relief,” he said. “This means those accessing healthcare, farmers, students and youth, businessmen. In terms of infrastructure, they have given us one road, the N-25, the one connecting Karachi-Quetta-Chaman. But we wanted more investment in education, more investment in health, which we did not see. We especially needed more opportunities for our youth, thousands of whom are running from pillar to post with their degrees in hand and looking for jobs.”
Regarding solar panels, Raisani said that they had removed the tax on solar panels, but instead imposed it on the inverter. “No matter how many solar panels you install, if you don’t have the inverter, it is the same thing. So there are some things that should be reviewed with seriousness.”
Mufti Misbahuddin, an MNA from former FATA area from the Jamiat Ulema-e-Islam (JUI) said that FATA had been ignored in the budget as it had been by previous governments.
“It should be now upto the public to decide on this,” he said referring to the budget. “Now the public has seen and heard it – there is nothing in it for them.”
In response to a question regarding the 7% increase in salaries, he said, “That is a joke. It is a joke with employees. Is this even an increase?” he questioned. “This is not a public-friendly budget. There is no relief for the public in it. The budgets given to us always comes from those on the ‘outside’, who don’t belong here. This too is an external budget, it is an IMF budget. Therefore, I believe there will be no welfare for the public in it, generally speaking, and as always, the people of the tribal areas are ignored.”
Meanwhile, speaking on behalf of the government, Minister of State Khel Das Kohistani said, “Whenever any budget comes, it is definitely criticized. Everyone says the same thing. Governments always say that it is public-friendly. But eventually it is discussed in the media. But I believe the way the opposition is silent, it means the budget is good, which is why they are silent. All they spoke about yesterday was the release of a single person, they did not utter a word on the budget, and they didn’t do it today either.”