Federal Budget for Fiscal Year Positive and Relief-Oriented, Says Attaullah Tarar

Pakistan’s Information Minister Attaullah Tarar described the federal budget for the upcoming fiscal year as “positive and relief-oriented” on June 17, 2026. The budget introduces tax reductions for the salaried class, abolishes advance and super taxes for exporters, and implements a three-year freeze on provincial transfers to fund security and economic relief, according to Tarar.

Speaking at a media briefing alongside State Minister for Finance Bilal Azhar Kayani, Tarar said the government created fiscal room for these measures through a “home-grown plan” and consistent effort. He attributed the stabilization of the economy to the leadership of the PML-N and the vision of Nawaz Sharif after the country faced a potential default.

How does the budget provide relief to taxpayers?

The budget introduces specific tax breaks for the salaried class and the housing sector. For individuals earning between Rs50,000 and Rs100,000, the tax rate is set at 1%, according to Tarar. He stated that the government also complied with demands to reduce tax slabs for those earning above that bracket.

Real estate buyers seeking homes between five and ten marlas will see a tax reduction. Additionally, the government has disbursed Rs90bn for the “Apna Ghar” scheme, Tarar said.

The industrial and export sectors received significant concessions. Tarar announced the abolition of the super tax and the previously applicable “advance tax” for exporters. State Minister Bilal Azhar Kayani added that the so-called “pink tax” has also been abolished.

How did the government increase tax revenue?

The government shifted its focus toward enforcement and digitisation to broaden the tax net without increasing the burden on existing taxpayers. Tarar claimed the Federal Board of Revenue (FBR) was reformed by replacing personal recommendation-based postings with merit-based hiring.

A “faceless system” now handles port clearances, removing the need for exporters to interact directly with customs officials. Tarar said this system ensures clearances are issued within days and eliminates “demands or delays.”

The ministry targeted specific industries to recover lost revenue:

• Sugar Mills: The government installed cameras and an IT system with QR codes to monitor production and sales, collecting Rs60bn in taxes.
• Tobacco Industry: Officials halted illegal trade and conducted raids to close a Rs200bn leak.
• Enforcement: At least Rs800bn was collected through enforcement in the past year.

Tarar noted that the Rs800bn recovered through enforcement was a result of Prime Minister Shehbaz Sharif’s personal efforts and remained independent of Pakistan’s International Monetary Fund (IMF) programme.

What other fiscal changes were announced?

The budget for the upcoming fiscal year includes several new tax categories and resource reallocations. The government proposed taxes on social media earnings and a fixed tax scheme for shopkeepers and small traders. Wholesalers and retailers will face a higher minimum tax rate, according to the budget details.

The government is also using tax policy to influence the automotive market. It introduced incentives for small electric bikes and vehicles while creating barriers for luxury e-vehicles.

To balance the budget and address security needs, the government announced a three-year freeze on provincial transfers. Finance Minister Muhammad Aurangzeb stated during the budget presentation that the strategy focuses on increasing productivity and promoting exports.

Tarar credited the recovery of several billion rupees to the establishment of new tribunals and the appointment of a new chairman for tax collection and dispute litigation. He said the law ministry and attorney general were directed to ensure 100 per cent recovery and vacate stay orders.

We did not just wait for room, we created it through consistent effort and as per a home-grown plan.

Attaullah Tarar