Finance Minister Senator Muhammad Aurangzeb has initiated the budget-making process for the fiscal year 2025-26, urging all federal ministries to submit their proposals by February 9, 2025.
In a departure from past practices, the process started earlier this year, with the Finance Division issuing the Budget Call Circular to all Federal Secretaries and Principal Accounting Officers on January 9, 2025.
In his letter to the ministries, the finance minister emphasized that the federal budget serves as an annual financial framework while also charting a three-year macroeconomic plan for the country. He stressed the importance of timely and meaningful contributions to the budget-making process to ensure effective financial management and resource allocation.
The Finance Division has clarified that each demand will be managed by a single Principal Accounting Officer, who will be responsible for performance-based budgeting. These officers will allocate funds to various cost centers with approval from the Finance Division.
The Accountant General of Pakistan (AGP) has been directed not to authorize payments for expenditures without budget provisions under the relevant head of account, including employee-related expenses.
Foreign exchange budgeting has also been prioritized to streamline release processes. All ministries, departments, autonomous bodies, and public sector entities have been instructed to provide estimates for foreign exchange outflows for FY26 in the prescribed format.
The Federal Board of Revenue (FBR) has also reached out to stakeholders in the public and private sectors, seeking tax-related proposals, which have been uploaded on the websites of the Finance Division and FBR.
These steps aim to ensure a consultative process to align the national budget with the government’s economic vision, “Uraan, Pakistan,” which focuses on stability and fiscal discipline.
The FBR, in its budget circular, has called for proposals aimed at broadening the tax base, introducing progressive taxation measures for affluent classes, phasing out tax exemptions, and simplifying tax laws to facilitate taxpayers. Other key objectives include reducing tax distortions, bringing the entire value chain under the GST regime, and addressing procedural anomalies.
Additionally, the National Assembly Secretariat has instructed ministries to submit their proposals for the Public Sector Development Plan (PSDP) for FY26 by January 31, 2025, to seek approval from relevant standing committees. According to parliamentary rules, standing committees are required to review and recommend amendments to the PSDP by March 1, failing which the proposals will be considered approved by default.
