In a major economic overhaul, Pakistan’s federal government is set to present a Rs. 17.6 trillion budget for the fiscal year 2025-26, introducing Rs. 2 trillion in new taxes and bringing digital creators into the tax net.

The budget, to be presented today in the National Assembly, includes sweeping reforms aimed at boosting revenue and meeting IMF conditions.

One of the most striking proposals in the budget 2025-26 is the inclusion of YouTubers, freelancers, and other digital content creators in the tax system. The government also plans to tighten enforcement for non-filers, increasing the GST rate from 18% to 20% and hiking the tax on cash withdrawals above Rs. 50,000 from 0.6% to 1.2%. These tax measures are expected to significantly expand the revenue base.

Motorists may face higher fuel costs as the petroleum levy is set to rise from Rs. 78 to Rs. 100 per liter, potentially generating Rs. 1.3 trillion in revenue. Additionally, a new 2.5% carbon levy will be introduced, aligning with global environmental policies.

Public sector employees will see a 10% salary increase, with an extra 30% disparity allowance for lower-grade staff (Grades 1-16). Pensioners are also set to benefit from a 10% raise, with Rs. 1.055 trillion allocated for pensions. Meanwhile, subsidies worth Rs. 1.186 trillion will remain in place to ease public burdens.

The budget allocates Rs. 2.55 trillion for defense and a staggering Rs. 8.207 trillion for debt servicing, highlighting fiscal pressures. On the development front, Rs. 1 trillion is earmarked for federal projects, including the construction of the N-5 Highway at a cost of Rs. 120 billion.

With the IMF’s conditions in mind, the budget 2025-26 seeks to balance austerity with growth. While new tax measures aim to strengthen revenue, critics warn of added public strain. As the National Assembly debates these proposals today, all eyes are on whether this budget can steer Pakistan toward economic stability.