Finance Minister Muhammad Aurangzeb unveiled a Rs17.573 trillion federal budget on Tuesday, setting a GDP growth target of 4.2% – a sharp jump from this year’s 2.7%. The strategy, he claimed, is designed to overhaul the economy’s “DNA” by boosting productivity and exports. Inflation is projected at 7.5%, while the fiscal deficit is targeted at 3.9% of GDP, down from 5.9%.

The government aims for a primary surplus of 2.4% and has set an aggressive tax collection target of Rs14,131 billion – an 18.7% hike over the revised estimate. Non-tax revenue is expected to reach Rs5,147 billion. To meet these goals, the budget introduces strict tax and enforcement measures, projected to raise Rs 670 billion in additional revenue. Relief worth Rs58 billion – mostly benefiting salaried individuals – brings the net gain to Rs623 billion.

Major tax changes include: Increased withholding taxes on services, digital platforms, and e-commerce,18% GST on imported solar panels, New 10% GST on FATA/PATA, Higher taxes on interest income, cash withdrawals, and 850cc vehicles, New levies on high-income pensioners, Restrictions on property/vehicle purchases by non-filers

The budget was received with a mixed reaction from stakeholders of the economy, with some expressing cautious optimism over recent policy shifts, while others remain sceptical due to persistent structural challenges

Real estate too saw mixed changes: a 1.5% cut in purchase tax, higher seller taxes, and the abolition of FED on transactions. However, the budget was received with a mixed reaction from economic stakeholders. Some expressed cautious optimism over recent policy shifts, while others remained sceptical due to persistent structural challenges.

Pakistan’s Youth Left Behind?

The government’s Finance Bill 2025-26 came under sharp criticism from policy analysts and youth advocates for overlooking Pakistan’s largest demographic: its youth. Despite over 60% of the population being under 30-and more than two million young people entering the workforce annually-the finance bill lacks targeted fiscal incentives or employment programmes for youth.

While Finance Minister Muhammad Aurangzeb acknowledged the economic potential of young Pakistanis, citing $400 million earned by freelancers last year, critics argue the bill offers rhetoric over real relief. Measures such as tax breaks for private universities and digital reforms are seen as legacy policies or indirect enablers, falling short of addressing the pressing youth employment and skills crisis.

The PSDP allocation for the Higher........

© Daily Times