Finance minister says budget to offer salaried class relief, power bill cuts by July

Federal Finance Minister Muhammad Aurangzeb said that the upcoming federal budget will include targeted relief measures for salaried individuals and further reductions in electricity tariffs, aiming for implementation by July. 

He made these remarks while speaking to the media following the inauguration of the Made in Gujranwala Exhibition organised by the local Chamber of Commerce and Industry.

Aurangzeb confirmed that a comprehensive relief package for the salaried class has been finalised and will be submitted to the International Monetary Fund (IMF) as part of ongoing budgetary discussions. 

He added that measures are in progress to reduce electricity bills either by July or earlier, as part of the government’s broader economic plan.

The finance minister noted that all prior targets agreed with the IMF have been met, and the Executive Board is expected to approve the staff-level agreement in May. Pakistan anticipates the disbursement of a $1 billion tranche under the current loan programme, along with potential climate-related financing.

Aurangzeb stated that 98% of budget suggestions from both public and private stakeholders have been received. He said relevant parties will be informed about which proposals are viable before the budget is formally presented in parliament. He clarified that once approved, the budget will be implemented in its final form from July 1 without post-approval changes, ensuring efficient execution.

Commenting on tax reform, Aurangzeb said while revenue collection from traders has increased, the trader facilitation scheme should not be viewed solely through the lens of tax revenue. A simplified tax return form is being developed for broader use, and the formulation of tax policy will now be overseen directly by the Ministry of Finance.

In a related development, a technical team from the International Monetary Fund (IMF) is scheduled to visit Pakistan next week to hold discussions with senior officials from the Federal Board of Revenue (FBR) regarding taxation proposals for the upcoming budget of 2025-26.

The visit, set for April 14, 2025, will see talks focused on expanding the country’s narrow tax base, with a particular emphasis on bringing retailers and other untaxed sectors into the tax system.

One of the key issues on the table will be the government’s desire to reduce tax rates for salaried individuals, a move the IMF will likely evaluate as part of broader fiscal discussions. 

Additionally, the two sides will explore the possibility of including the highest bracket of pension earners in the tax net, a subject that remains under review.

The IMF team’s visit is expected to last more than a week, coinciding with the departure of another IMF mission focused on governance and anti-corruption assessments.