ISLAMABAD: Opposition members in the National Assembly caused an uproar in today’s session and protested noisily as Finance Minister Muhammad Aurangzeb presented the new reforms in the annual budget FY2025-26.
Aurangzeb highlighted key economic reforms including tax relief for the salaried class, and other significant steps on government’s plans for sustainable development.
Despite the ruckus, the finance minister laid out an ambitious agenda aimed at stabilising the economy, improving the business environment, and broadening the tax base. Aurangzeb said that the government had exercised fiscal discipline and controlled public expenditure, which had allowed for such a growth-oriented budget to be presented.
Among key announcements was the proposal that the government had also presented with the initial budget announcement – decrease in the income tax rate for the salaried class. Salaries ranging from Rs 600,000 to Rs 1.2 million annually will now be taxed at a reduced rate of 1 per cent.
Moreover, support for the poor was announced as part of the Benazir Income Support Programme (BISP), which has now been increased to Rs 716 billion. BISP is expected to benefit one crore (10 million) families.
The finance minister also announced shift in solar panel policy saying that the tax on imported solar panels has been reduced from 18 per cent to 10 per cent. However, 46 per cent of components used in their assembly will now be taxed, which will likely lead to a 4.6 per cent increase in the price of imported solar panels.
FBR reforms also made part of the national assembly speech today, where the finance minister said that the Federal Board of Revenue (FBR) will require a warrant for arrests in cases involving up to Rs 50 million. This is done to improve transparency and reduce harassment. Moreover, the prerequisites for arrest have been expanded which will now include three notices, evidence of refusal to cooperate, or evidence tampering. The arrests will also need to be approved by a three-member committee and the arrested individuals will be presented before a court within 24 hours.
The government will also introduce electronic storage facilities – Electronic Warehouses – for farmers to help preserve agricultural produce and stabilize prices. The government also announced that the new industrial and EV policy is in the pipeline, aimed at promoting investment and modernising infrastructure.
The minister highlighted tariff adjustments as essential for long-term trade competitiveness as well.
In his speech, Aurangzeb addressed concerns regarding wealth declaration and property ownership. Restrictions have been proposed on properties acquired beyond declared resources, but there will be exemptions applicable to houses valued up to Rs 50 million and cars up to Rs 7 million, as per the Prime Minister’s instructions. Additionally, no withholding tax will apply to personally used residences held for over 15 years.
Aurangzeb noted that the government is working on streamlining the taxation of e-commerce businesses, shifting them to a simplified system with limited taxation. He reiterated that no one will be allowed to exploit the public, and that economic reforms will be implemented with full commitment.
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