Pakistan’s Finance Minister Muhammad Aurangzeb on Saturday emphasized that the proposed FY27 budget would “accelerate sustainable growth,” according to official statements. The remarks were made during the National Assembly debate on the budget, which was presented on June 12, as reported by the Pakistan Bureau of Statistics (PBS).
Key Objectives of the FY27 Budget
Aurangzeb highlighted that the budget prioritizes “sustainable and inclusive export-led growth,” aiming to boost productivity. He stated that the government has shifted focus from burdening taxpayers to “deepening and broadening” the tax base, citing changes in the last budget. The minister noted that taxpayers, including the salaried class, small businesses, and exporters, would see reduced burdens under the new proposals, aligning with “principles of equity and fairness,” according to a press release from the Finance Ministry.
Tax Reforms and Economic Growth
The minister outlined reforms to separate tax policy from administration, introducing an automated system to replace direct interactions between taxpayers and officials. This move, he said, aims to eliminate discretionary powers and enhance transparency. Aurangzeb also defended the Federal Board of Revenue’s (FBR) performance, stating that the government has collected $14 billion in additional revenue over the past two years, matching the amount collected in the 13 years prior (2011–2024), according to data from the Ministry of Finance.
Agricultural Support and Subsidies
Agriculture, described as the “backbone” of Pakistan’s economy, received significant attention. The Zarkhez scheme provides interest-free, collateral-free loans to 750,000 small-scale farmers, while Rs9.5 billion is allocated for the Prime Minister’s Youth Business & Agriculture Loan Scheme (PMYB&ALS), which will disburse over Rs109 billion in loans. A Rs15.8 billion package includes a Rs10 billion urea subsidy, and import duties on tractors and harvesters were abolished to modernize farming, according to the Finance Ministry.
Additional Economic Indicators
Aurangzeb cited a 6.6% growth in large-scale manufacturing, the highest in four years, and a current account surplus in the first 11 months of FY26. He also noted record $4.25 billion in remittances in May 2023, with hopes to meet the $41 billion target for FY26. IT exports rose 20% in the previous fiscal year, and youth freelancers earned $1.6 billion in exports, per data from the Pakistan Telecommunication Authority.
Addressing Discrepancies in Economic Data
Concerns about GDP growth and methodology were addressed by Aurangzeb, who clarified that no changes were made to the reporting framework. He explained that real GDP growth of 3.7% in FY26 was calculated using constant prices (base year FY15-26), aligning with international standards. Nominal GDP rose to $452.1 billion in FY26 from $408.2 billion in FY25, according to PBS.
Parliamentary Reactions and Recommendations
The National Assembly debated 140 Senate recommendations, with some lawmakers contradicting past positions. PTI leader Asad Qaiser called for higher cigarette taxes but exempting tobacco crops, while Muhammad Atif criticized limited tax relief for Pakistan International Airlines. The Senate Standing Committee on IT also reviewed the Pakistan Telecommunication (Re-Organisation) (Amendment) Bill 2026, which was previously passed without opposition, according to parliamentary records.
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