KARACHI:
The Policy Research and Advisory Council (PRAC) has acknowledged several positive measures in the federal budget for 2025-26, but has raised significant concerns about the budget’s failure to address critical challenges, particularly in the industrial sector, which could increase unemployment and destabilise Pakistan’s already fragile economic outlook.
In a statement, PRAC Chairman Mohammad Younus Dagha acknowledged the budget’s forward-thinking initiatives, including the Green Sukuk, which signals a positive shift towards sustainability and reflects the government’s commitment to addressing environmental concerns. He also welcomed the tax relief for salaried individuals, noting it would offer financial relief to the broader population.
However, he pointed out that the lack of an increase in the minimum tax threshold may not sufficiently ease the burden on the most vulnerable and heavily taxed segments. Additionally, the reduction in withholding taxes on property transactions by 1.5% across all tax brackets and the removal of 7% federal excise duty on property transfers are expected to stimulate the real estate and construction sectors.
PRAC expressed concerns about the budget’s failure to address the pressing economic challenges. The most significant issue raised was the budget’s reliance on unrealistic revenue targets and growth projections, which Dagha described as “disconnected from economic realities.”
