ISLAMABAD (PEN) : The federal government is poised to unveil a Rs17.6 trillion budget for the fiscal year 2025, prioritizing revenue generation through new taxation measures while offering significant financial relief to lower-grade public sector employees and pensioners.
Record Tax Target Set by FBR
The Federal Board of Revenue (FBR) is aiming for an unprecedented tax collection target of Rs14,130 billion. Official estimates place total income for the year at Rs19.4 trillion, signaling a tight fiscal landscape where increased taxation will play a key role in bridging the deficit.
Salary, Pension Relief for Government Employees
As part of the relief package, government employees in Grades 1 to 16 are expected to receive a 30% allowance increase. Additionally, an ad hoc relief allowance will be merged into their basic salaries. Retirees are also set to benefit, with pensions likely to rise between 5% and 7.5%.
Freelancers, Digital Earners Enter Tax Net
In a major policy expansion, the government plans to bring income from freelancing and digital content creation under the tax net. Earnings from international platforms and social media will now be subject to taxation, reflecting a shift toward taxing the growing digital economy.
Agricultural Income and Essential Goods in Focus
The upcoming budget is expected to introduce a framework to tax agricultural income — a longstanding recommendation by the International Monetary Fund (IMF). Additionally, the IMF has proposed levies on fertilizers, pesticides, and bakery items, which could impact the prices of everyday essentials if implemented.
Property and Customs Adjustments
While the federal excise duty on property transactions is likely to be scrapped, a 12% tax may be introduced in the formerly exempt Federally Administered Tribal Areas (FATA). In contrast, customs duty on imported goods and industrial raw materials could see a reduction of 2% to 3% to support manufacturing and exports.
Sector-Specific Tax Changes
Some industries, including beverages and tobacco, are expected to benefit from lower duties. However, a proposed 5.5% increase in GST on locally assembled vehicles up to 850cc could raise costs for consumers. The government is also considering lowering withholding tax rates on construction materials and gradually phasing out the super tax on large corporations.
Trade and Defense Spending Projections
The government has set a target of \$44.9 billion in total exports, including \$35.3 billion from goods, while imports are expected to reach \$65.2 billion. Defense spending is projected to rise by 18%, reflecting national security priorities.
Budget Session Timeline Finalized
The National Assembly has finalized the schedule for the budget session:
June 10*: Budget presentation
June 11–12*: No session
June 13–21*: General debate
June 22*: Break
June 23*: Discussion on necessary expenditures
June 24–25*: Voting on demands and cut motions
June 26*: Debate and approval of the Finance Bill
June 27*: Final voting on supplementary grants
Any changes to the calendar will be made with the approval of the National Assembly speaker.
