Federal Finance Minister Muhammad Aurangzeb has announced that the upcoming Federal Budget 2025 will include significant relief measures for salaried individuals and efforts to lower electricity costs. These announcements come as part of Pakistan’s economic planning in collaboration with the International Monetary Fund (IMF).
Speaking at a press conference, the finance minister confirmed that a detailed relief plan for the salaried class has been finalized and will soon be shared with the IMF. He also emphasized the government’s commitment to reducing electricity bills before July 2025, or possibly even earlier.
Relief Measures for Salaried Individuals
The government is preparing tax relief for the salaried class in the upcoming budget. While final details have not yet been made public, the relief plan is expected to include adjustments in income tax rates and thresholds. These changes aim to reduce the financial burden on fixed-income earners who have been affected by inflation and rising living costs.
In addition, the government is developing a simplified income tax return form. This new form will be easier to understand and use, especially for individuals who are not familiar with tax filing procedures. The goal is to make the process more user-friendly and encourage more people to become tax filers.
Reduction in Electricity Costs
Efforts are underway to reduce electricity bills for both households and businesses. According to the finance minister, the government is working to ensure that relief in electricity costs is provided by July 2025. If possible, this may be implemented even earlier.
This initiative is part of the government’s broader effort to control inflation and reduce the cost of living. Lower power bills will also help businesses by cutting operational costs, which may lead to increased economic activity and job creation.
IMF Agreement and Financial Support
Minister Aurangzeb confirmed that Pakistan has successfully met all targets set by the IMF. As a result, the IMF Executive Board is expected to approve the recently concluded staff-level agreement in May 2025. Following this approval, Pakistan will receive the next loan tranche of one billion US dollars.
In addition to the IMF support, Pakistan is expecting to receive further financing under the climate resilience and sustainability framework. This funding will support environmental and infrastructure projects in the country.
Public and Private Sector Involvement in Budget Planning
The finance minister also shared that around 98 percent of proposals from the public and private sectors have been received for consideration in the upcoming budget. These proposals are being reviewed, and relevant stakeholders will be informed about which recommendations will be included.
Importantly, the budget will be implemented in its final form from July 1, 2025. No changes will be made after approval in order to ensure quick and smooth execution of the announced measures.
Updates on Tax Reforms
As part of the government’s efforts to improve the tax system, several reforms are being introduced. Tax policy will now be directly managed by the Ministry of Finance instead of being handled by separate institutions. This change is expected to streamline decision-making and improve overall coordination.
Although tax collection from traders has shown improvement, the finance minister clarified that the newly introduced trader-friendly scheme is not linked to revenue targets. Instead, the focus remains on encouraging voluntary compliance and broadening the tax base.
A simplified tax return form is also in the works, which will make the filing process easier for individuals and small businesses. This move is expected to improve tax compliance and increase the number of registered taxpayers in the country.
Implementation Timeline
The upcoming federal budget will be presented soon, and its measures will take effect starting July 1, 2025. The government has confirmed that no post-approval changes will be made after this date. This approach is intended to provide certainty and allow for the immediate execution of budget policies and programs.
The Federal Budget 2025 is expected to bring welcome changes for salaried individuals and offer some relief in electricity costs. With continued support from the IMF and a focus on simplifying the tax system, the government aims to strengthen the country’s economy while reducing the burden on ordinary citizens.
All stakeholders, including salaried workers, small business owners, and tax professionals, should stay informed about the upcoming changes. Timely preparation and awareness will help ensure that they can take full advantage of the relief measures and new tax policies.
For accurate updates, detailed budget breakdowns, and updated tax calculators, visit AllPKTaxes.com regularly.
