Budget FY26-27: What relief measures has the government announced for next year?
Why this matters: local context for readers following news across Pakistan and the region.
As part of its budget proposals for the next fiscal year (FY26-27), the government has announced a range of measures to provide some measure of relief to the public, ranging from an expanded income support programme for the most vulnerable segment of the population, to lower taxes for individuals earning more than Rs183,000 a month. As part of its relief, subsidy and social safety plans, the government has announced a seven per cent increase in salaries for serving federal employees, a 7pc increase in pensions for retired employees, and a 10pc increase in the federal minimum wage. However, with inflation expected to average 8.2pc over the next fiscal year, the gains in real terms are expected to be minimal. The budget for the Benazir Income Support Programme has also been increased by 17pc to Rs838 billion, while the Kafalat programme has been expanded to Rs12 million families, and 9.2m children are to be provided educational scholarships under the government’s proposals. The PM Apna Ghar scheme, which has gained quite a lot interest in recent months, is getting another Rs71bn for the next year for subsidised, low-interest mortgage loans at a fixed mark-up of 5pc. Separately, the budget also holds some good news for the salaried class. The government has proposed that those earning an annual income of between Rs2.2-3.2m be taxed at a maximum rate of 20pc instead of 23pc; those earning between Rs3.2-4.1m be taxed at 25pc instead of 30pc; those making between Rs4.1-5.6m be taxed at 29pc instead of 35pc; while those making between Rs5.6-7m be charged at a maximum rate of 32pc instead of 35pc. Only those making above Rs7m a year will now be charged the maximum rate of 35pc. Because of these proposals, the number of tax slabs will increase from six to eight, allowing better rationalisation of the tax burden on various income groups. The government has also proposed removing the 9pc income tax surcharge on high-earners, while it also seeks to abolish the super tax for bus