Federal cabinet approves budget 2026-27 proposals

ISLAMABAD: A special meeting of the federal cabinet on Friday approved the budget 2026-27 proposals, ARY News reported.

According to details, Prime Minister Muhammad Shehbaz Sharif chaired a special cabinet meeting at Parliament House, ahead of the presentation of the federal budget for FY2026–27 in Parliament.

The meeting gave final approval to the budget proposals and related documents for the upcoming fiscal year.

Sources said that the cabinet approved a 7% increase in the salaries and pensions of government employees during the meeting.

Minister for Parliamentary Affairs Tariq Fazal Chaudhry stated that the federal budget will be presented in the National Assembly and the Senate today. Federal Finance Minister Muhammad Aurangzeb will deliver the budget speech.

Mr Chaudhry added that the Pakistan Muslim League (N) and all coalition partners will participate fully in the budget session. He also urged the opposition to play a constructive democratic role in the national interest.

According to sources, the total size of the budget 2026–27 is expected to be approximately Rs18 trillion.

Read more: Pakistan budget 2026–27 to be unveiled today

The budget is likely to provide income tax relief for salaried individuals, while a reduction in the Super Tax is also under consideration. However, no reduction is expected in the corporate income tax rate.

In addition, lower duties on cosmetics and personal care products—including make-up items, face powder, mascara, shampoo and soap—could lead to lower retail prices. Conversely, electric vehicles (EVs), hybrid vehicles and plug-in hybrid vehicles may become more expensive.

A proposal is also under consideration to increase the climate levy on petroleum products from Rs2.50 to Rs5 per litre.