Pakistan News
Budget 2025-26: Austerity budget offers ‘crumbs’ for relief

• Next year’s revenue target set at Rs14.13tr
• Provinces’ contribution helps Centre outperform fiscal target, record lowest budget deficit in a decade
• Subsidy allocations have been reduced by 14pc
• Reduced debt servicing drives expenditure containment of nearly Rs2.26tr
• Generous tax relief, incentives for construction sector
• Fuel levy, electricity surcharges to rise next year
• Tough crackdown planned on non-filers, tax evaders
• Development spending squeezed to cut deficit
ISLAMABAD: Maintaining an aggressive stance on fiscal consolidation, as required by the International Monetary Fund (IMF), Finance Minister Muhammad Aurangzeb on Tuesday still managed to offer some notional relief to the salaried class in the federal budget for fiscal year 2025-26, along with incentives for the real estate and construction sectors, in an effort to revive the struggling industrial sector and stimulate economic growth.
At the same time, however, the government announced it was imposing a ‘carbon levy’ of Rs2.5 per litre on petrol, diesel and furnace oil in the upcoming fiscal year, to be doubled the following year. It also introduced a 5 per cent tax on large pensions, an 18pc tax on imported solar panels, and an increase in the debt servicing surcharge on electricity to finance not only interest payments, but also principal debt. Additionally, it announced the gradual elimination of tax exemptions for the tribal areas beginning this year.
Ambitious targets
Despite a record tax shortfall of Rs1.07 trillion recorded for the current fiscal year, the finance minister set next year’s revenue target at Rs14.13tr — an 18.7pc increase from this year’s revised estimate of Rs11.9tr, against the original budget target of Rs12.97tr. This would include approximately Rs840 billion in additional revenue measures, on top of a Rs1.39tr automatic tax increase supported by projected inflation of 7.5pc and economic growth of 4.2pc and expenditure containment of nearly Rs2.26tr (equivalent to 2pc of GDP), driven primarily by reduced debt servicing costs, and also at the expense of development and public welfare initiatives.
Not only the Federal Board of Revenue (FBR), but the provincial governments, too, were unable to meet their commitment of maintaining a Rs1.22tr surplus for the current year. Still, they provided vital support to the federal government with a surplus of Rs1.01tr.
This contribution enabled the federal government to outperform its fiscal target and record a budget deficit of just 5.6pc of GDP (Rs6.44tr) — the lowest in a decade since FY2015-16 — compared to a higher projected deficit of 5.9pc (Rs7.28tr). This notable fiscal tightening was achieved through punishing additional taxation measures amounting to Rs2.2tr (1.8pc of GDP) alongside a reduction in expenditure as interest rates declined from a historic peak of 22pc.
Accordingly, the FY2025–26 budget sets an ambitious target to reduce the budget deficit to 3.9pc of GDP (Rs5.04tr), contingent upon a cash surplus of Rs1.46tr from the provinces. As a result, the primary budget surplus is projected to rise to 2.4pc of GDP, or Rs3.17tr, for the next year — up from this year’s 2.2pc of GDP (Rs2.5tr).
Relief for select groups
The government found sufficient fiscal space to offer some relief to the salaried class, who have been burdened by high tax rates, declining real incomes, and severe inflation over the past two years.
The finance minister proposed a reduction in income tax by half, to 2.5pc, on annual income between Rs600,000 and Rs1.2 million. It is pertinent to mention that there was a discrepancy in the income tax rate for the lowest taxable bracket announced by the finance minister and the tax rate mentioned in the finance bill, which was even lower at 1pc.
https://www.dawn.com/news/card/1916323
Clarity is awaited on this matter. Similarly, the annual tax on a salary of Rs1.2m was proposed to be reduced to Rs6,000, down from the current Rs30,000. Mr Aurangzeb added that the income tax rate for those earning up to Rs2.2m per annum would be cut to 11pc, down from the current 15pc. Similarly, the tax rate has been reduced to 23pc from 25pc for salaried income between Rs2.2m and Rs3.2m. In addition, the finance minister acknowledged that oppressive tax rates were driving highly skilled professionals to migrate, contributing to a “brain drain”. As a corrective measure, he announced a 1pc reduction in the surcharge on annual incomes exceeding Rs10m.
Apart from this, a 10pc increase in salaries and 7pc rise in pensions was announced for government employees. The salaries of armed forces personnel would also be increased by 25pc, including a special relief allowance in recognition of their recent heroic performance in response to Indian aggression, the finance minister said.
At the same time, the government introduced a generous tax relief and incentives for the construction sector, including access to cheaper mortgage financing, in a bid to revive large-scale manufacturing, which has been contracting for the past three years due to unprecedented increases in energy and borrowing costs. To this end, the finance minister announced a reduction in the withholding tax on the purchase of real estate from 4pc to 2.5pc. The next two current withholding tax rates of 3.5pc and 3pc will also be reduced to 2pc and 1.5pc respectively.
Additionally, a 7pc federal excise duty imposed last year on the transfer of commercial properties, plots and houses has also been proposed to be abolished.
As a new initiative, the budget includes a tax credit on mortgages for homes of up to 10 marla (250 square yards) and flats of up to 2,000 square feet. This is in addition to a new scheme aimed at promoting mortgage financing. The finance minister also announced a reduction in stamp duty on property purchases in Islamabad Capital Territory, from 4pc to 1pc, and expressed hope that provincial governments would follow suit by reducing heavy taxation on immovable property.
The government also succeeded in persuading the IMF to exempt fertilisers and insecticides from taxation for the current year, in an effort to position agriculture as the engine of economic growth.
Tightening the net
On the other hand, the finance minister announced an increase in the tax rate on interest income from 15pc to 20pc, a move that may discourage savings. However, he clarified that this would not apply to small savers or investments in national saving schemes.
Similarly, digital marketplaces and online businesses are to be brought into the tax net through courier companies, it was announced. The minister also announced a 5pc income tax on pensions exceeding Rs10m per annum for pensioners under the age of 70. In a move to promote a cashless economy, non-filers will now be subject to a 1pc advance tax on cash withdrawals, up from the existing 0.6pc. Taxpaying businesses will be discouraged from making cash sales exceeding Rs200,000. Additional measures have also been introduced to encourage online transactions and digital payments.
https://www.dawn.com/news/card/1916314
Strict steps will be taken against non-filers. Only taxpayers who submit their wealth statements will be allowed to undertake large financial transactions, such as the purchase of vehicles, immovable properties, securities, mutual funds, or the opening of certain bank accounts.
Tightening the noose around unregistered traders, the finance minister proposed the freezing of bank accounts, restrictions on property transfers, and the sealing of business premises in cases of serious violations of sales tax laws, with the involvement of trade bodies. In the same vein, he also announced a notional 0.5pc reduction in the super tax for corporate firms with annual incomes between Rs200m and Rs500m.
Improved tax collection
The finance minister noted a rise in the tax-to-GDP ratio, which has historically been one of the weakest aspects of Pakistan’s economy, from 8.8pc in June 2024 to 10.3pc in the first nine months of the current year. This figure is projected to reach 10.4pc by June 30, 2025. Including non-tax revenue, the federal tax-to-GDP ratio has improved to 11.6pc, representing an increase of 1.2 percentage points, up from 0.8 percentage points last year. The consolidated tax-to-GDP ratio, the finance minister added, has reached 12.3pc, including a 0.7pc contribution from the provinces. “The 1.6pc of GDP increase in FBR revenue is not only the highest in Pakistan’s history, but is also rarely seen anywhere else in the world in recent times,” the minister boasted.
Balancing the budget
The government has set the non-tax revenue target for the next year at Rs5.15tr, slightly higher than the current year’s Rs4.9tr. This brings the total gross federal revenue (FBR plus non-tax) to Rs19.28tr, up from the current year’s original budget target of Rs17.8tr, which was later revised down to Rs16.8tr. After transferring Rs8.2tr to the provinces, the net federal revenue is estimated to be Rs11.07tr for the next year, compared to Rs9.8tr this year. This leaves a projected federal deficit of Rs6.5tr, a reduction from the current year’s budgeted Rs8.5tr, which was later revised to Rs7.44tr.
Subsidy allocations have been reduced by 14pc to Rs1.19tr for the next year, down from Rs1.38tr in the current year. This is primarily due to a 13pc (Rs154bn) cut in power sector subsidies. The tariff differential subsidy for ex-Wapda distribution companies has been reduced by 9.7pc (Rs27bn) to Rs249bn, from Rs276bn this year. Meanwhile, the tariff subsidy for K-Electric has been cut by 28pc (Rs49bn), to Rs125bn from Rs174bn. An even larger reduction has been applied to the tariff subsidy for Azad Jammu and Kashmir, which has been reduced to Rs74bn from Rs108bn, reflecting a cut of 31.5pc.
The major non-tax revenue item is expected to be the petroleum levy on POL products, projected at Rs1.47tr, which is a 26pc increase from the current year’s Rs1.16tr. An even larger contribution is anticipated from State Bank of Pakistan profits, estimated at Rs2.4tr for the next year, though this marks a slight decline from Rs2.6tr this year.
The debt servicing cost for next year has been estimated at Rs8.2tr, representing an 8pc decline from actual repayments of Rs8.95tr, and 16pc lower than the original budget estimate of Rs9.78tr. Pension expenditure is expected to rise by around 4pc, reaching Rs1.06tr, up from Rs1.01tr this year. Military pensions are projected to grow by 12pc to Rs742bn, compared to a 10pc increase in civil pensions, which are expected to reach Rs243bn.
As a result, total current expenditure has been set at Rs16.29tr for the next year, slightly below this year’s figure of Rs16.39tr.
Published in Dawn, June 11th, 2025
Pakistan News
Pakistan High Commission, London Convenes Experts on Leveraging AI in Healthcare in Pakistan

Pilot projects for Electronic Medical Record (EMR) systems in major hospitals, starting from Islamabad, to be implemented with public-private partnership in AI and Health
The High Commission of Pakistan in London, hosted a high-level workshop on “Leveraging AI in Healthcare in Pakistan”, bringing together policy makers, AI experts, medical professionals, and academics from the UK and Pakistan.
The session was opened by the High Commissioner, who underscored the transformative potential of Artificial Intelligence to improve healthcare governance, diagnostics, electronic medical records, and medical education in Pakistan. In his pre-recorded keynote address the Federal Minister for National Health Services, Regulations & Coordination, Dr. Syed Mustafa Kamal, emphasised the need to embrace modern technologies and AI to improve public healthcare in Pakistan. In his remarks, Dr. Zubir Ahmed MP, Parliamentary Under-Secretary of State at the UK Department of Health and Social Care, shared UK’s experience in integrating innovation and AI to enhance health equity and access.

A distinguished line-up of speakers spoke on a range of critical themes. Mr. Abu Bakar, CEO of the Pakistan Software Export Board (PSEB), shared his vision for digital transformation and enabling health technology innovation in Pakistan. Ms. Ayesha Hussain, Data Governance Lead at University of Leeds, discussed responsible AI and data quality frameworks to ensure affordable, accessible, and high-quality healthcare delivery. Mr. Omer Butt, Co-founder of Vita Healthcare Solutions, built a case for AI use-cases that reduce waiting times and treatment delays, while addressing inequities in care delivery. Dr. Mahdi Murtaza – a young doctor – presented a pathway to leverage AI for primary care transformation in Pakistan and development of AI curriculum for medical professionals.

Dr. Suhail Chughtai, Clinical Director for Orthopaedics & Trauma, London, and AI Division Chair at UK Digital Health & Care, spoke about developing an AI-enabled Electronic Medical Records (EMR) system for Pakistan. Professor Jawwad Arshad Darr, Vice Dean of Enterprise at UCL’s MAPS Faculty and Co-founder of UPSIGN, presented strategies for training and developing academic capacity for AI research in Pakistan. Dr. Shahid Latif, Chair of the British Pakistani Psychiatrists Association, focused on AI in mental health care, while Ms. Zehra Shah, CEO of OPEN London, spoke about responsible AI in healthcare and its ethical implications. The discussion concluded with Mr. Rehman Qamar, Chief Project Officer at NADRA, who highlighted how NADRA’s citizen database could underpin secure, scalable digital health systems and EMR integration in Pakistan.
Participants agreed on several key outcomes, including the need for a national AI-enabled health data strategy, public-private partnership in AI and Health, the piloting of EMR systems in major hospitals, and the development of AI training curricula for medical professionals. They noted that building a Responsible AI Framework in Healthcare, which embeds Responsible AI principles into AI Applications and processes, was a must. They also agreed to re-convene to discuss other aspects of AI in healthcare in coming days.
The High Commissioner reaffirmed its commitment to present these recommendations to the stakeholders in Islamabad, ensuring that Pakistan could harness AI to deliver better healthcare for every citizen.
London, 24th September 2025
Pakistan News
Pakistan’s Voice of Conscience at the United Nations

Paris (Imran Y. CHOUDHRY) :- Former Press Secretary to the President, Former Press Minister to the Embassy of Pakistan to France, Former MD, SRBC Mr. Qamar Bashir analysis : In the crowded halls of diplomacy, where words often drown in endless speeches, moments arise that define not only the speaker but the nation behind him. Such a moment recently came when Pakistan’s Permanent Representative to the United Nations, Ambassador Asim Iftikhar, stood before the world and dismantled Israel’s attempt to misuse Pakistan’s sacrifices in the fight against terrorism to justify its indiscriminate assault on Gaza. His intervention not only forced an unprecedented apology from Israel’s ambassador, Danny Danon, but also reaffirmed Pakistan’s moral authority as the voice of conscience for the Muslim world and for oppressed people everywhere.
For me, this triumph was not just a matter of national pride but also personal reflection. Two years ago, while waiting for an audience with President Arif Alvi in Islamabad, I met Ambassador Asim Iftikhar as he prepared to assume his responsibilities as Pakistan’s envoy to France. In those quiet minutes, I found him to be articulate, deeply thoughtful, and radiating professionalism. There was in his demeanor a rare blend of intellectual precision and quiet confidence, qualities that I felt would take him far in representing Pakistan. That impression, formed in the corridors of the presidency, has since been vindicated in the most remarkable way, culminating in his recent performance at the United Nations where he shone not only as Pakistan’s voice but as the spokesperson of the Muslim world.
The confrontation that revealed his strength of character unfolded when the Israeli ambassador attempted to draw an analogy between Israel’s bombardment of Gaza and the U.S. operation in Abbottabad, Pakistan, which killed Osama bin Laden. It was a deliberate distortion, intended to cloak genocide in the language of counterterrorism, and it invoked Pakistan’s history in a way that was both misleading and offensive. Ambassador Iftikhar rose with words that pierced the façade. He reminded the world that Pakistan had been a frontline state in the global fight against terrorism, losing more than seventy thousand men, women, and children, dismantling terror networks, and rendering sacrifices unmatched by any other nation. “Pakistan’s record,” he declared, “is bright, recognized worldwide, and written in the blood of its martyrs.” He then turned the analogy on its head, pointing out with clarity that invoking Pakistan’s sacrifices to justify the mass killing of innocents in Gaza was “outrageous, incoherent, and morally indefensible,” for what Israel was doing was not counterterrorism but genocide, ethnic cleansing, and the conversion of Gaza into a slaughterhouse.
The chamber fell silent. Rarely does rhetoric give way to truth so powerfully, and rarely is propaganda so effectively exposed. The weight of his words left Israel’s representative cornered, and in a rare act of contrition, Danny Danon publicly apologized to Pakistan, admitting that invoking its name had been inappropriate. It was more than a diplomatic win; it was a narrative triumph, a moment where Pakistan’s honor was defended, its sacrifices acknowledged, and Israel’s distortion dismantled. For Pakistan, it was a reminder of the power of words when spoken with conviction, and for the Muslim world, it was proof that a principled voice could still rise above the noise of power politics.
This intervention was not an isolated act but part of a larger continuum of Ambassador Iftikhar’s work. Again and again at the United Nations, he has projected the suffering of Gaza and the West Bank with unflinching clarity. In June this year, he declared before the General Assembly that “the situation in Gaza is a stain on our collective conscience. Over fifty-five thousand lives have been lost, including eighteen thousand children and twenty-eight thousand women. Infrastructure has been razed—homes, hospitals, schools, cultural heritage, places of worship. Famine looms. Humanitarian workers and UN personnel are being attacked with impunity. This is not just a humanitarian catastrophe; it is a collapse of humanity.” These were not the words of a man speaking only for Pakistan. They were the words of a diplomat mobilizing the conscience of the world, urging not only the Muslim community but all of civilization to act, to recognize that without justice there can be no peace. He has repeatedly called for the only viable solution: the realization of a two-state solution on pre-1967 borders, with Al-Quds Al-Sharif as the capital of a sovereign, independent, and contiguous State of Palestine.
By vividly describing demolished schools, destroyed hospitals, displaced families, starving children, and the blockade of humanitarian aid, he has carried the Palestinian tragedy from the rubble of Gaza to the chambers of the United Nations, where it cannot be ignored. He has mobilized not just the Muslim world but also neutral states, civil society, and even hesitant Western capitals to rethink their silence. His interventions have contributed to the momentum behind resolutions in the General Assembly, including Pakistan’s pivotal role in the historic vote affirming the two-state solution, a success story of multilateral diplomacy where Pakistan once again played a leading role.
His diplomacy is marked by dignity. In confronting Israel, he did not descend into anger or hyperbole. Instead, he marshaled facts, invoked moral clarity, and exposed propaganda with surgical precision. He reminded the world that the fight against terrorism cannot be equated with the slaughter of innocent civilians, and in doing so, he not only defended Pakistan’s honor but also gave voice to the millions of Palestinians trapped under bombardment and occupation. His words carried the weight of truth, and truth compelled even Israel, often shielded by its allies, to apologize.
This was Pakistan at its finest—firm, dignified, principled. It was not just defending its own history but championing the cause of justice for Palestine, exposing tyranny, and mobilizing the conscience of the world. For me, watching this unfold brought back that first impression I had of him in Islamabad, a man destined to leave his mark. He has not only fulfilled that promise but exceeded it, standing tall as a diplomat whose words moved nations and whose voice gave hope to the oppressed.
The United Nations may often be a theater of speeches with little consequence, but sometimes, words alter the moral landscape. Through Ambassador Asim Iftikhar, Pakistan has shown that truth, when spoken with conviction, can silence distortion, compel apologies, and remind the world that dignity and justice still matter. In that chamber, Pakistan’s voice was heard and respected. It was the voice of a nation that has suffered and sacrificed, yet continues to stand for justice—not only for itself but for all oppressed peoples. And in that moment, Pakistan reminded the world that diplomacy, at its best, is not about power but about conscience, and that conscience, when articulated with courage, can still shake the foundations of injustice.
Pakistan News
Ambassador Mumtaz Zahra Baloch Meet The Pakistani Students In France

Paris (Imran Y. CHOUDHRY):- Ambassador Mumtaz Zahra Baloch held an interactive session with a group of Pakistani students in France. The Ambassador listened to the views and concerns of Pakistani students and outlined the various initiatives of the Government of Pakistan to support overseas Pakistanis.


She underscored the important role of Pakistani students and academia in promoting Pakistan-France relations and encouraged them to act as a cultural bridge between the two societies.
-
Europe News7 months ago
Chaos and unproven theories surround Tates’ release from Romania
-
American News7 months ago
Trump Expels Zelensky from the White House
-
American News7 months ago
Trump expands exemptions from Canada and Mexico tariffs
-
American News7 months ago
Zelensky bruised but upbeat after diplomatic whirlwind
-
Art & Culture7 months ago
The Indian film showing the bride’s ‘humiliation’ in arranged marriage
-
Art & Culture7 months ago
International Agriculture Exhibition held in Paris
-
Politics7 months ago
Worst violence in Syria since Assad fall as dozens killed in clashes
-
Politics7 months ago
US cuts send South Africa’s HIV treatment ‘off a cliff’