Finance Minister Terms FY27 Budget a Major Step Towards Economic Growth

June 2026 | By Azad News

Finance Minister Muhammad Aurangzeb has described the proposed FY27 budget as a significant step towards sustainable economic growth, saying the government has made substantial progress in creating an environment that supports investment, exports and business expansion.

Speaking at a media briefing in Islamabad, the minister said the government had made comprehensive efforts to promote export-led growth and strengthen the country's economic foundations. He highlighted the abolition of advance tax and reductions in super tax as important reforms aimed at improving the business climate.

Under the proposed budget, super tax will be abolished for businesses earning between Rs150 million and Rs500 million annually. For companies earning more than Rs500 million, the tax rate will be reduced from 10 per cent to 8pc, providing relief to the corporate sector.

Aurangzeb said the government also plans to abolish the super tax for exporters, following the directives of Prime Minister Shehbaz Sharif. He added that an additional subsidy of Rs70 billion has been proposed to strengthen the Export Finance Scheme and further support exporters.

Discussing tariffs, the finance minister said Pakistan is currently in the second year of a five-year strategy aimed at reducing the cost of raw materials and intermediate goods. He stressed that lowering production costs would improve industrial competitiveness and help reduce the trade deficit.

He noted that service exports, particularly in the information technology sector, are becoming increasingly important. According to the minister, IT exports are expected to reach $4.5 billion, while overall export performance is projected to remain strong in the coming fiscal year.

The government has also decided to maintain the 0.25 per cent Final Tax Regime (FTR) for the IT industry, freelancers and technology firms, following consultations with industry representatives and the Pakistan Software Houses Association (PASHA).

Aurangzeb emphasised that the budget provides relief to the salaried class, especially lower-income groups. Tax slabs previously set at 5pc and 15pc have been reduced to 1pc and 13pc respectively, easing the burden on millions of taxpayers.

Addressing concerns over rising oil prices due to tensions in the Middle East, the minister said the government has incorporated potential risks into its fiscal planning for the next financial year and remains prepared to manage any economic fallout.

On taxation, Aurangzeb stressed the importance of broadening and deepening the tax base. He said the government is working on a new tax administration model that will rely heavily on automation and artificial intelligence to reduce human intervention and improve efficiency.

Minister of State for Finance Bilal Azhar Kiani described the proposal as a budget for the salaried class, exporters, industrialists, the construction sector and individuals seeking affordable housing. He said the government has prioritised relief for lower-income groups while also supporting productive sectors of the economy.

In the agricultural sector, Aurangzeb highlighted a 15pc year-on-year increase in agricultural financing, with total financing surpassing Rs2 trillion. He said customs and regulatory duties on imported agricultural machinery, including tractors, combined harvesters and pumps, have been reduced to zero to improve productivity.

The finance minister also underlined the importance of the housing and construction sector, saying it remains a key driver of economic growth. Additional allocations have been proposed for the Prime Minister's Apna Ghar Programme to support affordable housing initiatives.

Information Minister Attaullah Tarar praised reforms introduced in the Federal Board of Revenue (FBR), saying measures aimed at improving transparency and reducing leakages are helping create fiscal space for economic relief and development spending.

Conclusion

The proposed FY27 budget reflects the government's strategy to promote economic growth through tax reforms, export incentives, support for the salaried class and increased investment in agriculture and housing. Officials believe these measures will help strengthen Pakistan's economy and create a more business-friendly environment in the years ahead.

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