Finance Minister Muhammad Aurangzeb on Saturday said the country was shifting from economic stabilisation to growth as he expanded upon the federal budget proposed yesterday (Friday) for the upcoming Fiscal Year 2026-27.
“The country’s economy is moving in the right direction […] now we will move from economic stability to growth,” says the FinMin while addressing a post-budget press conference along with Minister of State on Finance Bilal Azhar Kayani, Information Minister Attaullah Tarar, Federal Board of Revenue Rashid Mahmood Langrial and others.
In this budget, he said, the government has made significant progress in the direction of economic growth. “We have made comprehensive efforts to create an enabling environment for an export-led growth,” he said, pointing out the abolishment of an advance tax.
Aurangzeb also lauded the decision to abolish the super tax for businesses earning more than Rs500 million, terming it a “very meaningful direction of travel”.
However, he said, when he appeared before Prime Minister Shehbaz Sharif and cabinet members, they specifically ordered the abolition of the super tax for all the exporters, which he intends to include in his concluding speech of the budget session.
Speaking of the budget for fiscal year 2026-27, the finance minister said that the budget focuses on strengthening the tax system and improving exports through practical and workable measures.
He noted that efforts have been made to introduce reforms aimed at boosting exports and supporting exporters in a sustainable way.
Aurangzeb further announced that Rs70 billion additional subsidy has been allocated to support exporters, enabling them to access financing at a reduced rate of 4.5%. He said this step is aimed at strengthening export competitiveness and improving liquidity for the sector.
On the agriculture front, the minister said customs duties on agricultural machinery have been abolished, while agricultural lending has exceeded Rs20 billion. He added that the budget includes substantial measures for the development of the agriculture sector.
He reiterated that the economy has shown marked improvement this year and that the government is now firmly moving towards the next phase of growth.
Tax cuts
Referring to a series of tax cuts and sectoral incentives, the finance minister said that the government has eased taxation in the construction sector and expanded support for agriculture, IT, and salaried individuals.
He said taxes in the construction sector have been reduced to encourage activity and investment. In the agriculture sector, he noted that agricultural credit has increased by 15%, taking the total volume to over Rs2 trillion.
The minister said the Zarkhez-e-Asaan scheme is progressing in a better and more effective manner. He also assured that small farmers will not be asked to mortgage their homes to access agricultural support or financing.
Aurangzeb further stated that the youth loan scheme now stands at Rs262 billion, out of which Rs125 billion has been allocated specifically for agriculture.
He added that customs duty, additional customs duty, and regulatory duty on the import of agricultural machinery have been reduced to zero to facilitate modernisation of the sector.
On the IT sector, the minister said the Final Tax Regime (FTR) has been retained for the IT industry and freelancers, ensuring continuity and stability in the sector’s taxation framework.
Regarding salaried individuals, he said the government has prioritised relief for low-income earners. Tax rates for lower salary brackets have been significantly reduced, with the 5% slab brought down to 1% and the 15% slab reduced to 13%.
He added that measures related to higher salary brackets and surcharge adjustments have received positive feedback, reflecting improved balance in the taxation structure.
This is a developing story and is being updated with further details
2026-06-13 13:24:00
