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Tarar touts Rs800bn revenue recovery, calls budget a relief measure

ISLAMABAD: Information Minister Attaullah Tarar on Sunday defended the federal budget in the National Assembly, claiming enforcement measures had generated Rs800 billion in total revenue recovery and describing it as a “relief budget” marking the beginning of economic growth and stability.

Tarar, responding to remarks made by opposition members during the budget debate, said “very good suggestions were received.” Regarding the budget, he stated it had received global recognition. “The whole world, the media, opinion makers and economists are appreciating it,” he said, urging the opposition to “at least not undermine Pakistan itself.”

Salaried relief

On salaried relief, he stated, “Significant relief has been given to the salaried class. No tax has been imposed on those earning up to Rs50,000.” He clarified that those earning between Rs50,000 and Rs100,000 will pay only 1% tax, adding that relief had been extended across income slabs, particularly for professionals and the middle class.

FBR reforms and recovery

On the Federal Board of Revenue (FBR) reforms, Tarar said structural changes had been introduced. “If you recommend any customs or income tax officer today, that officer will be suspended by evening,” he claimed. He also spoke about tax litigation worth billions, alleging collusion between certain legal actors and tax evaders in the past, and said new tribunals had been established on merit with recovery mechanisms strengthened.

He noted the recovery of around Rs60 billion from the sugar sector, with enforcement measures generating around Rs800 billion in total. A transparent transfer and posting system had also been implemented, he said, to eliminate influence and recommendations. He added that this was achieved through determination, political will, and institutional coordination.

The information minister also said modern systems such as faceless customs appraisal had been introduced to reduce corruption and delays at ports, adding that these changes ensure “the burden of those who do not pay taxes will no longer fall on those who do.”

On retail taxation, Tarar mentioned that around 3.6 million retailers were previously outside the tax net and had now been brought into it through a fixed-tax scheme, creating fairness and transparency in the system.

Housing and exports

Regarding housing, the minister said relief had been given to the middle class, particularly in property transactions involving small plots. The “Apna Ghar Scheme” was also highlighted, under which loans of up to Rs10 million are being provided, targeted at low-income groups, with the initiative expected to stimulate construction activity, create employment, and strengthen economic growth.

On exports, Tarar stated that policies had been adjusted to support export-led growth, including the removal of advance tax and reductions in minimum tax and super-tax for exporters. The information minister also mentioned reductions in taxes within the services sector, including shipping services, where sales tax had been brought down from 18% to 0%.

Economic turnaround

Tarar recalled warnings that “Pakistan was going to default within a month” and that investment had completely stopped. He said “conditions were being set for Pakistan’s default” and that some were even hoping for it. “But by the grace of Almighty Allah, things turned out differently,” he noted, crediting PM Shehbaz Sharif’s leadership and saying that in difficult times “politics was sacrificed for the survival of the state.”

Describing the past economic situation, he said the exchange rate used to fluctuate like a “fan running continuously,” business activity had stalled, letters of credit were not being opened, and exporters’ goods were stuck at ports.

Further, inflation stood at 38% and interest rates above 22%.

Now, he said, GDP growth had improved from negative territory to around 3.7%, per capita income had risen from about $1,751 to $1,901, foreign exchange reserves had increased, and remittances had reached record levels.

Tarar also mentioned that the current account deficit had improved from around 8% of GDP to about 0.7%, and IT exports had reached around $3.8 billion with freelancers contributing significantly. This macroeconomic stability “did not come overnight,” Tarar stressed.

Consultations were held across multiple sectors including industry, chambers of commerce, IT, and agriculture before finalising the budget, Tarar shared.

Describing the budget as one that supports “farmers, labourers, shopkeepers, retailers, and salaried individuals,” he noted that agricultural relief measures include reductions in duties on imported machinery, along with enhanced support for youth and farmers. National leadership and institutions were credited for contributing to peace and stability, with emphasis on teamwork involving the SIFC and government economic teams.

Restraint in the House

Referring to the opposition leader’s speech the day before, Tarar pointed out that they too had once been in opposition and had witnessed incidents where “books were set on fire from these very desks and papers were thrown.”

Although he emphasised that protest is the right of the opposition and “this has always been an established tradition,” he noted that “for the first time, books were also thrown from the government benches towards the opposition benches,” highlighting the need for restraint.

He further stated that “time changes, people change positions,” but what is often forgotten is that dialogue has always been offered. “When we were there, we offered dialogue, and today from here also, we offer dialogue,” he said, adding that the difference lies in “attitude and intention.”

He also recalled that when they were in opposition, they too spoke about a “Charter of Economy” and a “Charter of Democracy,” and today, from the treasury benches, the same call continues. “This House is the custodian of democratic traditions,” he said.

PPP MNA calls on FinMin

Earlier, Pakistan People’s Party (PPP) MNA Hussain Tariq termed direct tax targets set in the new budget at Rs6.9 trillion as “very ambitious and unlikely to be achieved,” calling on Finance Minister Muhammad Aurangzeb to respond to his concerns.

Tariq stated that the budget is not just about figures, but also about balancing “debit and credit” and providing financial direction for the country’s population. He said the PPP understands budgetary discussions “on facts and figures,” but the party has always emphasised how the budget impacts ordinary citizens.

“If people are benefited, it is fine, but if a budget makes things more expensive, then we feel it should be changed,” he said, adding that there have been ongoing discussions within the government regarding the issue.

FBR targets

Referring to targets set by FBR, the MNA noted that a target of Rs14.131 trillion was set, which, like every year, was not achieved and had to be revised. He stated the new target of Rs15.264 trillion represents a 17% increase compared to last year, while inflation has been adjusted at 8%.

“Above that, how will it adjust?” he questioned, adding that PPP Chairman Bilawal Bhutto Zardari had also pointed out that the FBR sets targets but fails to achieve them, after which a “tug of war” begins between the state and provinces over revenue responsibilities.

On indirect taxes, Tariq said all members recognise them as regressive, noting a revised target of Rs6.5 trillion with a 17% revision added overall.

Inflation and cost of living

Tariq highlighted inflation pressures, saying the Sensitive Price Indicator had increased by 14.75%, reflecting a significant impact on the poor, and that the prices of 51 essential items used by low-income groups had increased in year-on-year data up to June 4. “I agree inflation is around 8% overall,” he said, “but there are other pressures as well.”

He added that electricity inflation had increased by 54% in a year. “If a person is earning a minimum wage, how will he pay electricity bills?” he asked. “If he pays bills, he will not be able to fulfil his children’s needs,” he said, stressing that citizens should not be left helpless due to external conditions such as war.

He further noted that in Sindh, where temperatures reach 47 to 50 degrees Celsius, load-shedding leaves people in extremely difficult conditions.

Agriculture and regional equity

On agriculture, Tariq said he appreciated Minister Rana Tanveer Hussain for his efforts in the National Food Security sector. He noted that opportunities in areas such as GMO and gene editing were not fully utilised in the past, and said policy improvements had been made, but farmers still do not benefit enough to invest in modern machinery.

He said agriculture often yields only a 50% profit margin while input costs remain high. Referring to government remarks, Tariq said the finance minister had claimed that agriculture received significant attention last year, however, this year only limited discussion took place. He also mentioned that Rs117.4 billion was allocated to agriculture, which he described as the backbone of the economy.

The MNA concluded by emphasising regional equity, saying it should not only be considered at the provincial level but must also extend to district-level investment, where economic stress is most visible.

He also added that the budget does not appear to provide a clear financial direction for the coming years, particularly in terms of employment generation and short and long-term economic policy.

PTI’s Asad Qaiser calls government “fascist”

Pakistan Tehreek-e-Insaf MNA Asad Qaiser, also speaking in the National Assembly, stated that both ruling parties had been defeated in Gilgit-Baltistan and that his party was not allowed to fully participate in the political process there.

Criticising the government, he remarked that those who “wear suits and ties here talk about democracy, but it is not democracy, it is fascism,” adding, “You are a fascist government.”

Discussing local energy concerns, Qaiser said his own district requires 180 megawatts of electricity yet faces 12-hour load-shedding. He stated that electricity is not being provided from Tarbela, emphasising that it is the right of the people to receive affordable electricity.

PPP’s Faruqui questions relief

PPP’s Sharmila Faruqui said that if economic “excellence produces a mediocracy rather than relief for the people,” then the direction of policy must be questioned. She noted that while the government is claiming relief for the salaried class, this is the same class that “pays more tax than anyone else,” adding that last year the salaried segment contributed around Rs550 billion, while the relief being offered is only about Rs50 billion.

She criticised the expansion of indirect taxation, including the climate levy and other revenue measures, as well as the expansion of the Sales Tax Third Schedule to around 30 items, including basic household goods, milk products, and other everyday essentials.

Faruqui argued that this approach increases the burden on already documented taxpayers while expanding indirect taxation on consumers. She also pointed out that relief appeared directed more towards credit card users, foreign travellers, and business class passengers rather than the poor. “If you are poor, you keep paying tax,” she said.

Referring to official estimates, Faruqui noted that poverty stands at around 29%, “meaning one in every four Pakistanis is poor.” She questioned the Economic Survey’s poverty benchmark of Rs8,400, asking, “can anyone here run a household on Rs8,400 a month?” and stressed that “the definition of the poverty line must be revised honestly.”

Demographic pressures

Faruqui warned that Pakistan’s population could reach 390 million by 2050 if current trends continue. With around 68% of the population under the age of 30 and unemployment at 7.1%, she criticised the budget for offering little for youth development, saying spending on a youth population of nearly 160 million amounted to “0.07%,” questioning national priorities.

Faruqui terms FBR “white elephant”

On the fiscal structure, Faruqui noted that around Rs8 trillion in current expenditure and federal revenue is consumed by interest payments, while pensions stand at Rs1.1 trillion, calling the situation unsustainable.

She also described the FBR as a “white elephant,” expressing frustration over repeated references to it without meaningful reform. Faruqui argued that had institutional inefficiencies been addressed earlier, provinces would not need to be asked to cover fiscal gaps under constitutional provisions.

Further, she cited circular debt at around Rs5.1 trillion and questioned why awards were being given to those responsible for the sector despite inefficiencies being passed on to the public.

She also described electricity and petrol prices as among the highest in the region, while “ministers are being rewarded for inefficiency.”

Karachi and regional disparities

On Karachi, Faruqui noted that the city pays the highest taxes in the country yet receives disproportionately low development allocations. She cited the Hyderabad and Sukkur motorway as examples, noting that against a total project cost of around Rs363 billion, only about Rs30 billion has been allocated, making completion unlikely.

NHA allocations were also described as inadequate, with Sindh receiving insufficient funding across multiple schemes.

Growth and IMF

In closing, while acknowledging the budget as moving from “stabilisation towards growth,” Faruqui termed the projected growth rate of around 4% insufficient and “mediocre.”

She stressed that the country cannot continue relying on increased taxation to finance debt servicing while development budgets are cut and pensions rise, and concluded that the salaried class should not continue bearing the burden of fiscal adjustment “to satisfy the IMF framework.”

Bilawal urges AJK protesters to end demonstrations peacefully

ISLAMABAD: Pakistan Peoples Party (PPP) Chairman Bilawal Bhutto Zardari on Sunday appealed directly to protesters in Azad Jammu and Kashmir (AJK), urging them to end their demonstrations peacefully and bring their protest activities to a “peaceful conclusion”.

In a press release, Bilawal said the “imminent signing of the Islamabad accord marks a historic moment, adding that at a time when international spotlight is firmly on Pakistan, the ongoing unrest in AJK is damaging both the Kashmiri cause and Pakistan’s reputation”.

Tensions have been rising in AJK following recent deadly clashes that have led to competing narratives over casualties, governance grievances, and political legitimacy. Official sources have confirmed at least seven deaths.

He warned that the situation is also creating an “unnecessary opportunity” for hostile actors and the “India-Israel nexus” to exploit developments for their own purposes.

The PPP chairman called on those who have taken the law into their own hands to surrender to local authorities and allow due process to take its course.

He stressed that all political grievances and disagreements must be resolved through “democratic, constitutional and peaceful means,” saying Parliament and the political process, not the streets, are the appropriate forums for resolving such issues.

Bilawal noted that the PPP has already called on the Election Commission to withdraw its “premature election schedule,” reiterating the party’s commitment to pursuing a political solution.

He said the party would seek to establish a Truth and Reconciliation Commission to address outstanding grievances and move the process towards a “just and lasting conclusion,” adding that the people of Kashmir should not be subjected to repeated cycles of protest and uncertainty.

He added that if all stakeholders, including the federal government, are in agreement, the AJK government could review notifications issued in relation to protesting parties at an appropriate time.

Reiterating a balance between accountability and fairness, Bilawal Bhutto Zardari said there can be no compromise on the rule of law or on holding unlawful actors accountable, but stressed that individuals who have done nothing wrong must not suffer the consequences of others’ actions.

Meanwhile, the PPP Azad Kashmir core committee has demanded that the Election Commission withdraw the current election schedule, calling for immediate consultations in light of the prevailing situation.

Addressing a press conference, PPP Azad Kashmir President Chaudhry Yasin said that “saving the state is the top priority” in the current circumstances, stressing that the party’s politics has always revolved around the Kashmir issue.

He recalled that Shaheed Zulfikar Ali Bhutto and Shaheed Benazir Bhutto highlighted the Kashmir cause at the global level, while adding that over the past seven months, efforts were made to resolve public issues and restore democratic processes.

Chaudhry Yasin said that while security personnel were martyred, civilians were also affected by the evolving situation. He criticised the hurried announcement of the schedule for migrant seats, saying it was issued only days before the protest call, which was not appropriate.

He noted that during negotiations, most demands of the Public Action Committee had been accepted, claiming that “37 out of 38 demands” were already implemented, while only the constitutional matter of migrant seats remained under discussion.

He said alternative constitutional and legal options exist regarding migrant representation, and added that a one-week extension was sought from the committee but was not accepted. In the current situation, he said, holding elections on migrant seats appears difficult.

Chaudhry Yasin urged the Election Commission to withdraw the schedule and continue the consultation process, saying PPP is not in favour of confrontation or conflict. He warned that hostile forces, including India, could take advantage of the situation.

He stressed that “12 migrant seats are not more valuable than human lives,” adding that solutions must be found through dialogue, political consensus and democratic process. He also pointed to emerging shortages of essential goods in Azad Kashmir, saying the region is facing serious uncertainty.

Other senior leaders present included former Prime Minister Sardar Yaqoob Khan, Information Secretary Javed Ayub, Senior Minister Mian Wahid, Javed Budhanvi, Sardar Zia-ul-Qamar, Chaudhry Qasim Majeed and Yasir Sultan.

Dar discusses regional developments with Turkish, Egyptian counterparts

ISLAMABAD: Deputy Prime Minister and Foreign Minister Ishaq Dar held separate telephone conversations on Saturday night with the foreign ministers of Turkiye and Egypt, discussing the evolving regional situation and recent progress towards an understanding between the United States and Iran, according to the Ministry of Foreign Affairs (MoFA).

In a post on X, MoFA said during his conversation with Turkish Foreign Minister Hakan Fidan, Dar exchanged views on regional developments and welcomed the encouraging progress towards an understanding between the US and Iran.

They expressed hope that the positive developments would pave the way for lasting peace and stability in the region and agreed to remain in close contact on further developments, the ministry added.

In a separate call, Dar spoke with Egyptian Foreign Minister Dr Badr Abdelatty. The two leaders discussed the latest regional developments, including progress towards an understanding between the United States and Iran.

According to MoFA, both sides expressed hope that the developments would contribute to lasting peace, security and stability across the region.

Dar and Abdelatty also agreed to maintain close contact, the ministry added.

On Saturday, Dar spoke with Swiss Foreign Minister Ignazio Cassis and Saudi Foreign Minister Prince Faisal bin Farhan and discussed with them the peace momentum in the Middle East.

Welcoming the encouraging progress towards an understanding between the US and Iran, Dar and his counterparts expressed the hope that ongoing efforts would soon contribute to peace and stability in the region, the Foreign Office spokesperson said in a press release.

Both sides agreed to remain in close contact.

Achakzai questions state policy as Shehbaz vows response in NA

ISLAMABAD: Prime Minister Shehbaz Sharif on Saturday used the floor of the National Assembly to respond to a wide-ranging speech by Opposition Leader Mahmood Khan Achakzai, defending the government’s record on Balochistan and counterterrorism while promising a detailed reply to the opposition leader’s remarks at an appropriate time.

The exchange took place during the ongoing budget debate, chaired by Speaker Ayaz Sadiq and attended by Finance Minister Muhammad Aurangzeb.

The session began with a quorum shortfall, with only 52 members present against the required 84. Despite the lack of quorum, proceedings continued. Speaker Sadiq also announced the establishment of a budget desk in the Parliament House library to assist lawmakers with budget-related information.

Separately, the speaker censured Pakistan Tehreek-e-Insaf (PTI) lawmaker Iqbal Afridi, accusing him of misbehaviour, using abusive language and assaulting people. Sadiq said he had no right to occupy the chair if he could not ensure the protection of others.

Read: Budget 2026-27: Govt cuts taxes, ends surcharge for four salaried class income slabs

Opening the debate before what he described as “near-empty chairs”, Achakzai condemned what he called a campaign against the Pashtun people in Balochistan and rejected attempts to portray Pashtuns as terrorists.

“We condemn those who say that Pashtuns are terrorists,” he said, adding that Pashtuns had never compromised their freedom or acted as agents of any external power. “I consider it a grave sin to discriminate against any human being on the basis of colour, race or language,” he added.

Achakzai invoked historical grievances in Balochistan, referring to the execution of Nawab Nauroz Khan and his sons during the era of Field Marshal Ayub Khan, the raid on Ataullah Mengal’s residence, the disappearance of Mengal’s son and the killing of Akbar Bugti, whose funeral prayers, he said, were not permitted.

“Pakistan cannot be run in this manner,” he remarked.

The opposition leader also paid tribute to former prime minister Zulfikar Ali Bhutto, saying he had helped unite Pakistan after the country’s dismemberment. He recalled visiting Nusrat Bhutto following Bhutto’s execution and finding her distressed over the confiscation of her property, claiming he had intervened to protect it.

Achakzai further criticised the government’s handling of protests, alleging that children gathered at D-Chowk to demand the release of PTI founder Imran Khan had been shot and that women and children faced unacceptable treatment following the May 9 unrest.

He accused successive governments of treating Balochistan, Khyber Pakhtunkhwa and Sindh like colonies, remarking that “even the British were better by comparison”.

Commenting on the merger of the former Federally Administered Tribal Areas (FATA), Achakzai argued that India had responded by revoking the special constitutional status of occupied Kashmir. He added that many who once rallied in support of Kashmir were now protesting domestically.

Reaffirming the constitutional right to protest, Achakzai turned his attention to Waziristan, describing it as a region where every piece of land had a recognised owner. He said the deployment of the military there had produced consequences that were still being felt today.

Appealing for restraint, he urged the government not to “entangle the army and the state”, warning that young people on both the civilian and security sides were losing their lives. “The people of Waziristan are the owners of Waziristan,” he said.

Read More: Budget 2026-27 income tax calculator: find out your new take-home salary

Despite his criticism, Achakzai adopted a conciliatory tone towards the end of his speech, addressing the prime minister directly and proposing that political forces sign a memorandum of understanding to move forward collectively.

He recalled holding late-night meetings with Shehbaz Sharif to ease tensions between the Pakistan Peoples Party and the Pakistan Muslim League-Nawaz, facilitating a meeting between Nawaz Sharif and Benazir Bhutto in London, meeting Nawaz during his exile, and helping unite 36 political parties around a common agenda.

He concluded with a pointed question: “Is it not a violation of the Constitution to make winning candidates lose?”

Responding from the floor, Prime Minister Shehbaz said he had listened carefully to Achakzai’s speech but would reserve a detailed response for a later occasion. “I will not give a detailed response to it at this time. I will do so at an appropriate occasion,” he said.

Describing parliament as a house representing all four provinces, the prime minister said political differences were natural but Pakistan’s existence remained the foundation of everyone’s collective future. “Any sacrifice made for Pakistan is too little,” he said.

Rejecting Achakzai’s criticism regarding provincial rights, Shehbaz said there could be no disagreement over the provinces’ entitlement to national resources. He cited Balochistan’s share in the Reko Diq project and noted that the province’s allocation under the 2010 National Finance Commission Award had doubled, with Punjab contributing Rs11 billion to the arrangement.

The prime minister also highlighted development initiatives in Balochistan, including a Rs75 billion solarisation programme for farmers and the construction of a dual carriageway costing Rs300 billion.

Addressing security issues, Shehbaz said external actors were involved in fuelling terrorism in Balochistan and defended the fencing of the Pakistan-Afghanistan border as a necessary measure.

He added that members of the armed forces and police continued to sacrifice their lives daily in the fight against terrorism, particularly in Khyber Pakhtunkhwa.

“These martyrs leave their own children orphaned to save the nation’s children from becoming orphans,” he said, urging lawmakers to honour and respect those who had laid down their lives.

Following the prime minister’s remarks, PTI Chairman Barrister Gohar Ali Khan briefly addressed the House, saying the speech “did not answer our questions”. Speaker Sadiq instructed him to keep his comments brief.

US-Iran deal near finalisation, electronic signing soon: PM Shehbaz

ISLAMABAD: Prime Minister Shehbaz Sharif on Saturday said that the peace deal between Iran and the United States is expected to be finalised in the next 24 hours.

A day prior, PM Shehbaz said that a “final, agreed-upon” text of the peace deal between Tehran and Washington had been reached, adding that Islamabad was working “closely” with both sides to finalise the next steps of the process.

“We are closer to a peace deal than ever before,” the premier said on X, adding that Pakistan is preparing for the electronic signing of the peace deal, and technical-level talks would follow afterwards.

“We would like to thank [the] United States of America and Islamic Republic of Iran for their ongoing commitment during the negotiations, and we extend our sincere appreciation to our brothers in the region for their support,” he wrote.

“We are confident that this historic peace deal will form a strong foundation for lasting peace.”

Yesterday, Iranian Foreign Minister Abbas Araghchi made similar comments, calling the potential deal the “Islamabad memorandum of understanding”.

“The Islamabad Memorandum of Understanding has never been closer,” he wrote on X, urging the press to refrain from speculating until it is finalised.

“In line with our responsible and transparent approach, all details will be shared with the public in due course.”

On Wednesday night, it looked like war had resumed, with Washington and Tehran trading strikes after an American Apache attack helicopter went down near the Strait of Hormuz.

The two countries traded strikes again on Thursday, with Trump warning that he had planned “bigger” bombing raids today.

However, he cancelled the strikes following discussions with the highest levels of leadership in Tehran.

“Discussions and final points have been, in both concept and great detail, approved by all parties involved, including the United States, Israel, Saudi Arabia, UAE, Qatar, Turkiye, Pakistan, Bahrain, Kuwait, Jordan, Egypt, and others,” he wrote on Truth Social.

The war started on February 28 with joint US-Israeli strikes on Iran, with both countries trading attacks until a ceasefire was agreed upon in April, with Pakistan acting as a mediator. A round of talks was held in Islamabad that month, though no deal was reached after 21 hours of negotiations.

21 terrorists killed in North Waziristan operations over 72 hours: ISPR

RAWALPINDI: Continuing their intelligence-based operations (IBOs) in Khyber Pakhtunkhwa’s North Waziristan, the security forces have killed 21 terrorists in the last 72 hours, the Inter-Services Public Relations (ISPR) said on Saturday.

In a statement, the military’s media affairs wing said multiple terrorist locations were engaged in the “general area Miranshah and surroundings in North Waziristan”.

“Following fierce fire exchanges, in [the] last 72 hours, 21 more khwarij belonging to Indian-sponsored Fitna-al-Khawarij, including four kharji ring leaders (Kharji Khalid Raza alias Salar, Kharji Muftoon, Kharji Musa and Kharji Imran alias Ayan) have been sent to hell, thereby causing a significant blow to the khwarijs’ network operating in the area,” the ISPR said.

The Pakistani government uses the term “Fitna al-Khawarij” to refer to the banned Tehreek-e-Taliban Pakistan (TTP) and its affiliates.

The ISPR said the killed ring leaders were “highly wanted for their involvement in numerous terrorist activities, including killing of security forces personnel and innocent civilians”.

It noted that since the operations began last week, with 27 terrorists killed over 72 hours earlier, a total of 48 terrorists have been killed in the “highly skilful and precise operations”.

Weapons and ammunition were also recovered from the terrorists, the ISPR said, stressing that they “remained actively involved in numerous terrorist activities and killing of innocent civilians”.

Sanitisation operations will continue to eliminate the remaining holed up terrorists from the areas, the military said.

It affirmed that the “relentless counterterrorism campaign under vision ‘Azm-i-Istehkam’ (as approved by Federal Apex Committee on National Action Plan) by security forces and law enforcement agencies of Pakistan will continue at full pace to wipe out the menace of foreign-sponsored and supported terrorism from the country”.

On June 2, the district administration imposed Section 144 for an indefinite period in the Miranshah subdivision, restricting all movement and traffic amid security concerns.

The measure was widely seen as indicative of an intensification of counter-militancy operations in North Waziristan, with the administration taking extraordinary precautions to forestall any retaliatory action as the area continues to face militancy.

Before the imposition of Section 144, security forces were reported to have foiled a suicide attack by terrorists on a military post near Miranshah.

After two consecutive months of improvement, Pakistan’s security situation deteriorated sharply in May 2026, driven primarily by escalating terrorist violence in KP and Balochistan, according to the Pakistan Institute for Conflict and Security Studies (PICSS).

As KP and Balochistan continue to grapple with militancy, with attacks often targeting security personnel and law enforcers, the state has intensified counter-terrorism operations.

FY27 budget balances public relief with IMF conditions

ISLAMABAD: Religiously following critical conditions of the International Monetary Fund (IMF) — revenue target, fiscal deficit and primary surplus — to continue fiscal consolidation, Finance Minister Muhammad Aurangzeb on Friday announced a three-year freeze on provincial transfers as the government reallocated resources for security needs and relief measures for the salaried, corporate, real estate and export sectors to revive struggling economic activity.

In his third budget — and the fifth of the major coalition partners — the minister also proposed taxes on social media earnings, a fixed tax scheme for small traders and shopkeepers, a higher minimum tax rate for wholesalers and retailers, incentives for small electric vehicles and bikes, and barriers for luxury e-vehicles.

Mr Aurangzeb said next year’s budget had been prepared with a clear strategy aimed at increasing productivity and promoting exports. To achieve this, incentives had been provided for export industries, increased agricultural productivity and facilitation of information technology.

He said an important objective of the budget was to increase revenue through better tax compliance and enforcement, rather than increasing the burden on existing taxpayers. This would be done through new compliance and enforcement systems alongside the FBR’s restructuring.

The minister announced a 7pc increase in salaries and pensions for all government employees and a 10pc increase in the minimum wage to Rs40,700 — a measure seldom implemented by the private sector.

On the other side, income tax relief has been provided for salaried individuals in various slabs.

The tax rate has been reduced by 3 percentage points for annual incomes between Rs2.2m and Rs3.2m, by 5 percentage points for those earning over Rs3.2m and up to Rs4.1m, and by 6 percentage points to 29pc for those earning between Rs4.1m and Rs5.6m.

Likewise, the super tax has been abolished for business incomes ranging from Rs150m to Rs500m and reduced by 2 percentage points to 8pc for those above Rs500m. This relief is not applicable to banks, oil and gas exploration companies and fertiliser companies, which will remain subject to the current rate.

Tax cuts have also been offered for the sale and purchase of real estate and the construction sector, as the minister said these would activate construction and associated industries such as cement, iron, glass, paints, tiles and hardware.

With a historic Rs1.15tr tax shortfall in the current fiscal year, the finance minister announced an ambitious tax target of Rs15.264tr for next year, up Rs2.28tr, or 17.6pc, from the revised assumption of Rs12.983tr after missing the Rs14.131tr target set in last year’s budget.

This would involve revenue adjustments of around Rs650bn to Rs700bn to be filled through additional measures and stronger enforcement. The remaining Rs1.6tr or so is expected to flow organically from the combined 12pc impact of inflation and economic growth.

The minister said the federal and provincial governments had agreed on a mechanism of “cooperative federalism” to collectively meet national needs without affecting the constitutional rights of the provinces. Under the mechanism, to be renewed every year until 2028-29, provincial shares from the federal divisible pool under the 7th National Finance Commission will remain intact.

However, despite Rs15.264tr tax collection next year, the divisible pool for the purpose of provincial and federal shares has been frozen at Rs13.35tr to meet “strategic national requirements”.

The Rs1.9tr higher amount — the difference between the Rs15.264tr tax collection and the Rs13.35tr frozen amount — would remain available to the federal government in the shape of grants under Article 164 of the Constitution, the finance minister said.

A part of the additional funding would go to defence expenditure, up 17.7pc, or Rs450bn, to Rs3tr. Another additional amount of Rs707bn has been earmarked for “other grants”, up 39pc to Rs2.528tr for next year, while Rs430bn would be set aside for emergency needs instead of Rs275bn this year, including Rs20bn for natural disasters.

“Defence budget has been increased sufficiently to make the country’s defence invincible in view of the uncertain regional situation,” the minister said.

This additional fiscal space is on top of the Rs1.8tr provincial surplus, or 1.3pc of GDP, to be provided to the federal government under the IMF-dictated National Fiscal Pact. The provinces provided Rs1.38tr cash surplus to the Centre under the pact this year.

Despite this rebalancing, the finance minister did not change three key targets set by the IMF in April this year — FBR revenue target at Rs15.264tr, primary surplus at 2pc, or Rs2.828tr, of GDP and fiscal deficit at 3.6pc, or Rs5.226tr.

The target for non-tax revenue has been set at Rs5.336tr, up from Rs5.1tr this year, even though the largest source — State Bank profit — will be down 40pc to Rs1.435tr next year from Rs2.43tr, owing to lower interest rates.

The petroleum sector would thus take over as the largest non-tax revenue spinner, with Rs2.034tr contribution next year, up from Rs1.8tr this year. This means petroleum revenue would be a critical driver, with almost Rs1.68tr contribution next year, up from Rs1.498tr this year.

Total federal expenditure has been estimated at Rs18.77tr for next year compared to Rs16.286tr budgeted this year. The Rs7.03tr federal deficit would be met through Rs1.79tr provincial surplus, Rs813bn of external financing, Rs6.046tr of domestic borrowing and Rs161bn in privatisation proceeds.

The government has allocated over Rs8tr for mark-up payments, up 16pc from Rs6.94tr this year. Total expenditure has been projected at Rs17.495tr — almost Rs2.5tr, or 16.6pc, higher than Rs15tr during the current year.

Pension expenditure would also rise to Rs1.17tr next year from Rs1.055tr this year. The major chunk of Rs822bn would go to military pensions and Rs272bn to civil pensioners. On top of this, Rs64.5bn would be the additional impact of the 7pc increase in civil and military pensions next year.

The amount of subsidies has been scaled down to Rs1.09tr for next year against Rs1.157tr this year, while running the civil government would cost Rs1.07tr next year compared to Rs1.02tr this year.

Power sector subsidies have been curtailed to Rs830bn for next year against Rs893bn this year. Of this, subsidy allocation for K-Electric has been increased by 30pc to Rs163bn next year against Rs125bn this year, while subsidy for AJK has been increased by Rs7bn to Rs81bn.

On the other hand, subsidy for all other distribution companies has been scaled back to Rs333bn for next year from Rs341bn this year. A block allocation of Rs252bn has been made for overall circular debt containment.

PTI criticises budget, says it benefits elite over common man

ISLAMABAD: Pakistan Tehreek-i-Insaf (PTI) on Friday rejected the federal budget for fiscal year 2026-27, describing it as “a refined exercise in elite self-preservation” that offered little relief to ordinary citizens.

Finance Minister Muhammad Aurangzeb earlier unveiled the Rs18.8 trillion budget for FY2026-27, announcing total federal expenditure of Rs18,771 billion and setting an economic growth target of 4pc, while describing the budget as anchored in “stabilisation, reform and growth”.

In a statement, PTI Central Information Secretary Sheikh Waqas Akram criticised the budget document, calling it “a refined exercise in elite self-preservation”, presented with “the sincerity of a merchant extolling yesterday’s unsold stock”.

Akram said the government was presenting a 3.7pc growth rate as evidence of economic recovery while comparing its performance with that of the PTI government during the Covid-19 pandemic.

“The previous administration, despite a global pandemic that paralysed economies worldwide, recorded growth approaching 6 percent in its final year while strengthening the current account and remittances,” he said.

He argued that the current government was portraying a more modest economic performance as a major achievement while relying heavily on remittances, external borrowing and factors that, according to him, had little direct impact on people living and working in the economy.

Akram claimed poverty had increased significantly, pushing millions of people below the poverty line.

Read: Budget 2026-27: FinMin projects 4% growth as govt unveils fiscal, tax and reform agenda

“The poorest sections of society are left to manage as best they can, their circumstances worsened by conditions this budget claims to have mastered,” he said, adding that the government had acknowledged the impact of higher oil prices and flood-related losses on households while highlighting targeted subsidies introduced in response.

The PTI leader said the salaried class remained under pressure despite the relief measures announced in the budget.

“The salaried class, already the most heavily taxed segment, finds meeting basic household obligations an exercise in sustained improvisation,” he said.

He maintained that reductions for higher-income groups and the abolition or reduction of super tax for selected businesses primarily benefited those better positioned to withstand economic pressures.

According to Akram, adjustments to construction-related withholding taxes favoured developers rather than addressing the housing needs of the broader population. At the same time, relief for ordinary employees would be quickly eroded by inflation projected at 8.2pc.

He further said that over the past three to four budgets, the government had imposed a range of new taxes, reduced tax rates, withdrawn zero-rating under the Fifth Schedule and eliminated several exemptions.

Also Read: PM Shehbaz says ‘time of prosperity has begun’, terms FY27 budget one of ‘relief’

“Beyond a few minor measures, the budget offers nothing substantive for the common citizen or small businesses,” he said.

Akram also criticised measures affecting small businesses and traders, including the introduction of a new fixed tax regime, the expansion of withholding tax on unregistered purchases, and enhanced production monitoring through digital invoicing.

He alleged that the government was increasingly relying on large-scale, faceless audits and stricter enforcement measures.

“This approach does not aim to broaden the tax base but relies on harassment and coercion of already compliant taxpayers to extract more revenue while ignoring widespread tax evasion,” he said.

The PTI leader further alleged that the budget continued what he described as a pattern of “statistical flexibility and selective historical recollection”.

He claimed the government was attributing positive developments to its own policies while overlooking earlier achievements and criticised what he termed the presentation of regional tensions as a source of strategic advantage and defence export opportunities.

“The presentation of regional tensions as a source of strategic advantage and defence export opportunities, even amid conflict, shows indifference to the human and economic costs borne by ordinary citizens,” he said.

Gohar slams budget as ‘disappointing’

Meanwhile, Party Chairman Barrister Gohar Ali Khan said that the upcoming federal budget would not bring any relief to the public, stressing that it would fail to improve the lives of ordinary citizens.

Speaking to the media, the PTI chairman said the government had “no performance over the past four years” and accused it of continued borrowing instead of reducing expenditures. He said the budget was expected to be “disappointing”, adding that “there will be no relief for the public” in the financial plan.

Barrister Gohar criticised what he described as rising “extravagance and mismanagement” in government spending, saying the economic situation had worsened over time. He added that the budget should have focused on bringing real change in people’s lives, but instead, according to him, it reflected poor priorities.

Barrister Gohra also said efforts were ongoing to arrange a meeting with party founder Imran Khan, but there had been “no positive response” so far.

He remarked that the public was suffering while the government was “asking for informal engagement”, adding that the party did not want “photo sessions” with the prime minister.

The government is set to unveil a massive Rs17.5 trillion (approximately $61 billion) consolidated budget for the fiscal year 2026-27 today to meet strict International Monetary Fund austerity conditions.

The high-stakes spending plan balances fiscal tightening and IMF structural directives while introducing relief measures for the poorest citizens and modest salary bumps for government workers. The budget comes as much of the population continues to feel the effects of the Iran-US war, with no indication that the conflict is easing.

The government will propose measures to raise revenue and cut spending while shielding the nation’s poorest.

Under pressure to meet austerity conditions from the International Monetary Fund, Finance Minister Muhammad Aurangzeb will submit a delayed Rs17.5 trillion ($61-billion) spending plan for the fiscal year starting next month in the National Assembly.

US-Iran deal text finalised, peace closer than ever: PM Shehbaz

ISLAMABAD: Prime Minister Shehbaz Sharif said on Friday that the “final, agreed upon text” of the peace deal between the United States and Iran had been reached, adding that Pakistan was working with both sides to finalise the next steps.

“Amid ongoing intense mediation efforts by Pakistan, we are fully aware of incessant misinformation campaign being waged by those who want to sabotage the peace deal. Setting aside the noise, we can confirm that a final, agreed upon text of the peace deal has been reached and Pakistan is now working closely with both sides to finalise the next steps. Peace has never been this close as it is now,” he said in a post on X.

Iranian Foreign Minister Abbas Araghchi said earlier that the proposed Islamabad Memorandum of Understanding between the Islamic republic and the United States was closer than ever to being finalised.

“The Islamabad Memorandum of Understanding has never been closer,” Araghchi said in a post on X.

He urged the media to refrain from speculating about the contents of the agreement while negotiations are still ongoing.

“Pending its finalisation, the media should refrain from entering speculation about its content,” he wrote.

Araghchi said details of the memorandum would be made public once the process is completed.

“In line with our responsible and transparent approach, all details will be shared with the public in due course,” he added.

Meanwhile, a White House official told Anadolu that Iran had agreed to a “performance-based deal” with the US, which would require concessions on Tehran’s part before receiving any sanctions relief.

As part of the deal, the official said, Iran’s nuclear material would be destroyed and removed, its nuclear programme would be dismantled, and “none of their money released until they perform”.

The official also said that the Strait of Hormuz would remain open and Iran would agree to stop funding “terrorist groups”.

“This is what they have agreed to. This is a performance-based deal,” the official added.

Trump says Iran’s leaked deal terms are untrue

United States President Donald Trump said on Friday that Iran’s leaked comments on a deal with the ​US did not represent what has been agreed ‌to in writing.

“What they said, including their weak and pathetic statement on having a deal, bears no relation to the truth. Very dishonourable people ​to deal with. With them, there is no such ​thing as dealing in good faith. Amazing!” he wrote ⁠on Truth Social.

“They better get their act together, and ​fast!” Trump said.

Trump said on Thursday he was calling off new ​strikes on Iran because a deal had been reached.

Terms of the deal as described earlier today by Iranian officials appear to offer Tehran much ​of what it has demanded so far, with Trump appearing ​to win little of what he has sought, beyond the reopening of the ‌Strait ⁠of Hormuz, which Iran shut after he ordered attacks in February.

A senior Iranian source told Reuters that the draft would waive sanctions on Iran’s oil, unfreeze billions of dollars ​of its funds ​and require ⁠a cessation of hostilities on all fronts, including in Lebanon.

Nuclear issues would be set aside for ​later talks. Washington wants a deal to ensure ​that Iran ⁠never develops a nuclear weapon; Iran says it is not seeking one.

The waiving of sanctions, unfreezing of Iranian assets and halt ⁠to ​Israeli attacks on Lebanon are essential Iranian ​demands. The source made no mention of what Iran might offer in return.

A Western source told Reuters that the memorandum between the US and Iran to halt the war in ​the Gulf could be signed as soon as Sunday with Geneva emerging as the likeliest venue.

The source said language in ‌the memorandum was still being finalised and Iran was sticking to its position that the deal must also end fighting in Lebanon, where Israel has been bombing Lebanon’s civilian infrastructure while saying they are in a fight against Hezbollah.

The aim was to finalise the wording by Saturday so the agreement could be signed by US Vice President JD Vance and Iran’s Parliament Speaker Mohammed Bagher Ghalibaf. No venue had been established, but Geneva was emerging as the likeliest.

Iran’s Mehr news agency ​said the terms also included other key US concessions, including a commitment to withdraw its forces from around Iran and present a plan for rebuilding the shattered Iranian economy.

“The United States ​and its allies must submit plans for Iran’s reconstruction worth at least $300 billion,” the Mehr report said.

The report also cited a diplomat briefed on the matter as saying that Iranian negotiators had agreed to a deal, though it remained unclear whether it had been approved by Supreme Leader Mojtaba Khamenei, who has final authority over major foreign policy and military decisions.

Israeli Prime Minister states that he will not let Iran have nuclear weapons

Israel’s Prime Minister Benjamin Netanyahu stated on Friday on X that “as long as” he is the PM, “Iran will not have nuclear weapons.”

“There is full agreement between me and President Trump on this issue.”

He further claimed that for “30 years, I have been at the forefront of the international campaign against Iran’s nuclear program,” adding that were it not for him, “Iran would long ago have had atomic bombs to destroy Israel.”

Iran has repeatedly denied seeking nuclear weapons.

Iranian media reveals details of 14-point draft memorandum with US

Iranian media on Friday published the details of a 14-point draft memorandum of understanding between Tehran and Washington, revealing significant differences from provisions previously reported by Axios regarding sanctions relief, frozen Iranian assets, reconstruction commitments, and the scope of future negotiations.

According to Mehr, the draft has 14 points and remains subject to final review and approval by relevant Iranian authorities.

The two reported versions share several key elements, but significant differences emerge in how those objectives would be implemented.

Axios reported a 60-day “extension” of the existing ceasefire, including in Lebanon, while nuclear negotiations continue.

The draft published by Mehr instead calls for an “immediate and permanent” cessation of hostilities on all fronts, including Lebanon, followed by 60 days of negotiations toward a final nuclear agreement.

The two accounts also differ on the reopening of the Strait of Hormuz. Axios reported an “immediate” reopening of the strategic waterway without tolls and restoration of normal shipping volumes. The Iranian-reported draft stipulates reopening the strait within 30 days and in coordination with Iran.

Sanctions relief represents another major point of divergence.

According to Axios, US sanctions relief would be linked to Iranian compliance with the agreement. The draft published by Mehr goes significantly further, calling for suspension of sanctions on Iranian oil, petrochemical products, and derivatives, full access to Iran’s financial resources, and eventual lifting of all primary and secondary US sanctions, as well as related measures imposed through the UN Security Council and the International Atomic Energy Agency’s Board of Governors.

The treatment of frozen Iranian assets also differs substantially.

Axios reported that Iran could gain access “to some” frozen funds for humanitarian purchases through a mechanism discussed with Qatar. By contrast, the draft published by Mehr calls for the release of $24 billion in frozen Iranian assets during the 60-day negotiating period, with half of the funds to be made available before final negotiations begin.

Another major difference concerns reconstruction and post-war guarantees.

While the Axios report did not refer to reconstruction assistance, the draft published by Mehr states that the US and its allies would be required to present plans for rebuilding Iran worth at least $300 billion.

The Iranian-reported draft also includes several provisions not mentioned in the Axios account, including a US commitment not to interfere in Iran’s internal affairs, respect for Iranian sovereignty, and withdrawal of US forces from areas surrounding Iran.

It also includes a US pledge not to increase military deployments in the region and not to impose new sanctions during negotiations.

On the nuclear issue, the two versions overlap to some degree.

IRNA reported that under the current MOU, Iran makes no commitment regarding the transfer of management of the Strait of Hormuz, and the future of its management will be undertaken by a joint decision-making framework between Tehran and Oman.

Axios reported a framework for addressing Iran’s enriched uranium stockpile, with further nuclear measures contingent on a follow-up agreement. The draft published by Mehr states that Iran would reaffirm its commitment under the Nuclear Non-Proliferation Treaty not to produce nuclear weapons.

Perhaps the most consequential difference concerns the scope of future negotiations.

According to the draft published by Mehr, the final agreement would be limited to enriched nuclear material, enrichment activities, sanctions relief, and Iran’s economic reconstruction program. It explicitly excludes discussions on Iran’s missile program and support for “resistance groups.”

IRNA stated that no agreement is made regarding the nuclear file under the current memorandum, and nuclear talks will take place within 60 days after signing.

The draft further states that any final agreement would be endorsed through a UN Security Council resolution and that a monitoring mechanism would be established to oversee implementation—provisions not mentioned in the Axios report.

Mehr noted that the text still requires review and approval by Iran’s relevant authorities before it can be formally adopted.

A deal to permanently end the US-Israeli war on Iran could be signed as soon as this weekend, President Trump said Thursday, in a day dominated by whiplash developments.

Iran said Thursday that the “main part” of the text of understanding with the US had been finalised, while accusing Washington of undermining progress through shifting positions.

US forces carried out a second day of strikes on Thursday against multiple targets in Iran, following the downing of an Apache helicopter above the Strait of Hormuz.

Iran’s Islamic Revolutionary Guard Corps (IRGC), for its part, said 18 major US military targets had been struck at the Ali Al Salem and Ahmad Al Jaber air bases in Kuwait, Sheikh Isa Air Base in Bahrain, and a base hosting American fighter jets in Jordan.

The latest escalation has heightened regional tensions following US strikes on Iran and Tehran’s subsequent announcement that it was closing the Strait of Hormuz to maritime traffic.

Trump says Iran war deal close as Strait of Hormuz tensions linger

The deal to end the US-Israeli war on Iran, if confirmed, would be the most significant diplomatic breakthrough yet, which has killed thousands in Iran and Lebanon and sent global energy prices sharply higher after Iran all but closed the Strait of Hormuz to shipping.

“We just made a great settlement of the war with Iran,” Trump told reporters at the White House on Thursday.

“The strait will officially open as soon as we sign, which could be soon, very soon, maybe over the weekend in Europe,” he said, adding that Vice President JD Vance would attend the deal signing.

Since mid-March, Trump has repeatedly claimed a deal with Iran to end the war was close. The two sides have traded strikes this week, straining a ceasefire announced in April.

Iranian media reported Foreign Ministry spokesperson Esmaeil Baghaei as saying large parts of the agreement have been finalised, but Iran would not compromise on its red lines.

“We have not reached a conclusion on this matter,” he said. “This is a very important issue that is currently being reviewed by the relevant decision-making bodies.”

Trump says G7 support ‘irrelevant,’ claims ‘victory’ in Iran war

US President Donald Trump has dismissed any support from G7 as “irrelevant” and claimed that “we have won the war in Iran,” in a brief phone interview broadcast by Italian channel La7 on Friday.

Trump made remarks during a call with La7’s Washington correspondent.

Asked whether he had a message for G7 leaders, Trump said the US had not needed external support.

“We didn’t need any support. So, we have won the war. It was a bit irrelevant, irrelevant! I have to go. I’m in an important meeting, but we have won the war in Iran. We didn’t need their help,” Trump said.

The comments came ahead of the G7 summit scheduled for June 15-17.

Regional tensions that began on February 28, after Israeli and US strikes on Iran triggered a cycle of military confrontations, retaliatory attacks and diplomatic disputes.

Iran and Israel also exchanged strikes in recent days before pulling back, highlighting the fragility of a ceasefire and ongoing efforts by regional and international mediators to revive diplomacy and prevent a broader conflict.

Govt unveils Rs18.8tr budget, sets 4pc growth target

ISLAMABAD: Finance Minister Muhammad Aurangzeb, while presenting the federal budget for fiscal year 2026–27 in the National Assembly on Friday, announced total federal expenditure of Rs18,771 billion and set an economic growth target of 4%, describing the budget as anchored in “stabilisation, reform and growth”.

Aurangzeb said Pakistan’s economy grew by 3.7% in FY2025–26 despite floods and regional tensions, reaching a size of $452 billion. He said per capita income had increased to $1,901, while large-scale manufacturing posted its strongest growth in four years.

He said current expenditure stood at Rs17.4 trillion, including Rs8,054 billion for mark-up payments and Rs2,680 billion in grants. He added that foreign exchange reserves had risen from below $4 billion three years ago to more than $17 billion, sufficient to cover nearly three months of imports.

For FY2026–27, he said GDP growth is projected at 4%, inflation at 8.2%, the budget deficit at 3.6% of GDP, and the primary surplus at 2% of GDP.

The minister also noted that the policy rate had fallen from 22% to 11.5%, while the debt-to-GDP ratio stood at 68.5%, with an improved debt maturity profile.

He further said Federal Board of Revenue (FBR) tax revenues are targeted at Rs15,264 billion, while non-tax revenues are estimated at Rs5,336 billion.

He added that FBR collections had risen from Rs7.2 trillion to Rs13 trillion over the past three years, reflecting strengthened enforcement and tax base expansion.

External sector and capital markets

Aurangzeb said Pakistan had returned to international capital markets after four years, raising $750 million through Eurobonds.

He added that the country had also entered the Chinese capital market for the first time through a Panda Bond, which received strong investor demand.

He further said 11 IPOs were launched during the year, while more than 250 companies began operations in Special Technology Zones.

Privatisation and state asset reforms

The finance minister said the government remained committed to accelerating privatisation, arguing that the private sector would drive future growth.

He recalled the privatisation of First Women Bank and the sale of Pakistan International Airlines (PIA) through a “transparent and live-televised auction” on December 23, 2025, which generated Rs185 billion.

“Private sector is going to lead this country,” Aurangzeb told the House, adding that DISCOs, GENCOs and airports would be privatised in the next phase.

Defence, infrastructure and connectivity

Aurangzeb said Rs3 trillion had been allocated for national defence.

He added that Rs365 billion had been earmarked for highways, railways and ports, including the upcoming launch of the Karachi–Rohri section of the ML-1 railway line.

Additional allocations include Rs157.5 billion for highways, Rs100 billion for the N-25 dual carriageway conversion, and Rs30 billion for the M-6 Sukkur–Hyderabad Motorway.

Energy, circular debt and gas sector

The finance minister said energy remained “a lifeline for the economy”, adding that net-zero accumulation of circular debt had been achieved.

He added that Rs1,091 billion had been allocated for electricity subsidies and Rs116.2 billion for sustainable energy. A direct subsidy mechanism will be introduced in January 2027 to improve targeting and transparency.

Aurangzeb further stated that LNG agreements with Qatar and Italy had been renegotiated, reducing 35 cargoes and saving $1.2 billion.

He said uninterrupted gas supply had been ensured to fertiliser plants, stating: “We did not let fertiliser production halt even for a single moment.”

He added that 100 MMCFD of additional gas had been added since March 2024, while discoveries from 17 fields yielded 108 MMCFD of gas and 16,000 barrels of oil. Offshore exploration has resumed after two decades, with 24 blocks awarded and around $1 billion expected in investment.

Tax reforms and relief measures

Aurangzeb announced tax relief for salaried individuals, including a reduction in key middle-income slabs from 23% to 20%.

He said no income tax would be imposed on annual earnings up to Rs600,000, while super tax on income above Rs500 million would be reduced from 10% to 8%.

Property withholding tax for filers was reduced from 5.5% to 2.75%, while capital value tax on foreign assets was abolished.

Export tax was reduced from 2% to 1.25%, and the Export Development Surcharge was abolished.

He added that the government is also considering removing super tax on exporters.

Small traders and FBR modernisation

The finance minister said a fixed tax regime under Section 99B of the Income Tax Ordinance would allow retailers to pay 1% tax on annual sales, with simplified filing and a minimum Rs25,000 payment requirement.

He said compliant traders would be issued a “green slate”, under which tax officials would not enter business premises.

Aurangzeb said FBR reforms would include a National Faceless Centre, AI-based systems, and integration of third-party data from property, vehicles and banks. Production monitoring systems have also been installed in cement and sugar sectors.

Industrial development and SEZ expansion

The finance minister said 6,860 acres of Pakistan Steel Mills land will be converted into a Special Economic Zone to attract investment and create jobs.

He added that industrial design and automation centres are being established in Karachi, Lahore and Sialkot, while Rs88 billion has been allocated for the Export Refinance Scheme.

IT, digital economy and governance

Aurangzeb said IT exports increased by 20% to $4.5 billion, while 5G services will be launched in five cities.

He further said 92% of remittances are now received through bank accounts, while digital merchant integration rose from 500,000 to 1.67 million.

He added that 39,000 companies are registered with SECP, reflecting improved business activity.

Social protection and human development

Aurangzeb further said Rs71 billion had been allocated for the Prime Minister’s Apna Ghar scheme and Rs54 billion for low-cost housing programmes.

He said the Benazir Kafalat Programme will cover 12 million families, while Benazir Taleemi Wazaif will benefit 9.2 million children. Higher education scholarships worth Rs46 billion and Rs22 billion for Daanish Schools were also announced.

He said 68% of Pakistan’s population is under 30, calling youth development a key priority. He added that 515,000 young people had been trained under NAVTTC, with a 53% employment success rate.

Climate challenges and external vulnerabilities

The finance minister said flood losses amounted to Rs822 billion, highlighting Pakistan’s vulnerability to climate change and water stress.

Aurangzeb said Pakistan had strengthened its global economic standing through capital market access and improved investor confidence. “Pakistan’s image has improved significantly and its voice is being heard internationally,” he added.

He also referred to Pakistan’s broader regional diplomatic role during recent tensions, stating that Pakistan-China relations remained a “key pillar of economic stability”.

Concluding his speech, the finance minister expressed gratitude to the prime minister, coalition partners, opposition, provincial governments and military leadership for their support in achieving economic stabilisation and reform progress.