President Zardari assents to Finance Bill 2026, finalising federal budget

ISLAMABAD: President Asif Ali Zardari on Friday formally assented to the Finance Bill, 2026, days after it was passed by the National Assembly, completing the constitutional process for the federal budget for the upcoming fiscal year.

The Finance Bill, 2026 was approved by the National Assembly earlier this week, giving legal effect to the federal government’s financial proposals for the fiscal year beginning July 1, 2026.

During the passage of the bill, the House adopted amendments moved by the Finance Minister in Clauses 5, 6, and 6A, while rejecting the Senate’s recommendations regarding Clause 6.

Opposition parties, including PTI and JUI-F, submitted more than 60 amendments across Clauses 2, 3, 4, 5, 6, and 8, all of which were turned down through a majority vote.

The budget framework outlines key macroeconomic projections, including a GDP growth target of 4.0% and an inflation estimate of 8.2% for the fiscal year 2026–27. The fiscal deficit is projected at 3.6% of GDP, while the primary surplus is expected to reach 2.0% of GDP.

Read More: Federal budget proposes higher taxes on imported luxury vehicles

On the revenue side, the Federal Board of Revenue (FBR) collection target has been set at Rs15.264 trillion. Net federal revenues are estimated at Rs11.752 trillion, while total expenditures are projected at Rs18.77 trillion. Out of this, approximately Rs8.05 trillion has been allocated for debt servicing and interest payments.

For development spending, Rs1 trillion has been earmarked under the Federal Public Sector Development Programme (PSDP), while the overall national development programme has been estimated at around Rs3.675 trillion.

The budget also approves Rs3 trillion for defence expenditure. Significant allocations have also been made for pensions, civil administration, subsidies, and social protection programmes

. The Benazir Income Support Programme (BISP) has been allocated Rs838 billion, reflecting an increase aimed at expanding social protection coverage for low-income households.

On salaries and pensions, the government has proposed a 7% increase for federal employees along with a similar raise in pensions.

Additional relief measures have also been announced for government employees and armed forces personnel, with tax relief structured across four income slabs for the salaried class.

On the taxation front, imported vehicles with engine capacities between 2,000cc and 3,000cc will be subject to 86% customs duty, while vehicles above 3,001cc will face 92% duty.

High-value imported electric vehicles will attract customs duties ranging from 30% to 40% depending on their value brackets, whereas electric vehicles valued at $75,000 or below will remain exempt from customs duty.

A concessional 10% sales tax has been imposed on children’s stationery items, including pencils, pens, and sharpeners.

In addition, a one-time fixed tax of Rs10,000 will be levied on vehicles up to 1,000cc in the federal jurisdiction, while pre-2010 models in the same category will be subject to a Rs20,000 token tax.