ISLAMABAD: Federal Minister for Finance and Revenue Muhammad Aurangzeb said on Saturday the government’s new budget was designed to move the economy from stabilization to growth, citing tax relief, export incentives and tariff reforms as measures aimed at accelerating investment, exports and economic activity.
The comments came a day after Pakistan unveiled an Rs18.77 trillion ($67.49 billion) federal budget for fiscal year 2026-27, seeking to sustain economic gains achieved under an International Monetary Fund (IMF) program while shifting focus toward growth after years of balance-of-payments pressures and high inflation.
“When we were sitting here at this time last year, we had talked about the direction of travel of this economy,” he told a post-budget news conference.
“At that time, I had said that, God willing, we would move from economic stability toward growth and would continue taking this journey forward.”
Aurangzeb said the government had made “significant progress” in that direction while pointing out the government had sought to create an enabling environment for export-led growth, pointing to tax reforms, cheaper financing and tariff reductions aimed at improving competitiveness.
He said advance tax had been abolished and the super tax rate for businesses with annual income exceeding Rs500 million ($1.8 million) had been reduced from 10 percent to 8 percent, while the government was also moving to eliminate the levy for certain exporters.
The minister also highlighted tax relief for salaried workers, reductions in transaction taxes to support housing and construction, and measures aimed at boosting agricultural productivity.
He noted that agricultural financing had increased by around 15 percent year-on-year to more than Rs2 trillion ($7.1 billion), while customs duties and other import levies on agricultural machinery, including combined harvesters, tractors and centrifugal pumps, had been reduced to zero.
The government has set a GDP growth target of 4 percent and an inflation target of 8.2 percent for the coming fiscal year after estimating economic growth at 3.7 percent in FY26.
Pakistan’s economy has stabilized significantly over the past years following a series of IMF-backed reforms that helped rebuild foreign exchange reserves, narrow external imbalances and bring down inflation from multi-decade highs.
