Budget 2026-27 sets Pakistan on path to sustainable growth: Aurangzeb

ISLAMABAD: Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb on Saturday said the federal budget for 2026-27 reinforces Pakistan’s transition from economic recovery to sustainable growth, with a strong emphasis on export-led expansion and creating a business-friendly environment.

Addressing a post-budget press conference alongside Federal Minister for Information and Broadcasting Attaullah Tarar, Minister of State for Finance Bilal Azhar Kayani, senior finance officials and the chairman of the Federal Board of Revenue (FBR), Aurangzeb outlined key policy measures aimed at boosting competitiveness, increasing exports and accelerating economic activity.

Reflecting on the country’s economic progress, the finance minister said the government had moved beyond the recovery phase discussed last year and was now focused on achieving long-term economic growth.

“When we sat here last year, we spoke about economic recovery. Today, I can say that we have made meaningful progress and are now moving towards growth,” he said.

Aurangzeb said the budget translates that vision into concrete policy actions by making export-led growth a central pillar of the government’s economic strategy.

Highlighting tax reforms, he said the government had introduced several measures to reduce the cost of doing business and improve the competitiveness of export-oriented industries.

He described the abolition of advance tax as a major initiative to ease liquidity pressures on businesses, particularly exporters, while the rationalisation of the super tax reflects a shift towards a more growth-oriented tax regime.

“We have reduced the super tax rate for large businesses from 10 percent to 8 percent, which is a significant move in the right direction,” he said, adding that the measure had received a positive response from the business community.

The minister said that, following consultations and directives from Prime Minister Shehbaz Sharif, additional tax relief would also be extended to certain sub-exporters through a reduction or abolition of the super tax burden.

“This proposal was presented to the prime minister and the cabinet, who specifically instructed that relief should be provided to sub-exporters as well,” he said, adding that the measure would be formally incorporated into the winding-up speech to ensure its implementation.

“This is about setting the right direction of travel—moving towards a tax system that supports growth rather than constrains it,” Aurangzeb remarked.

The finance minister also highlighted the government’s focus on broadening and deepening the tax base through structural reforms, including the introduction of a modern tax administration system based on automation, artificial intelligence and reduced human intervention to improve efficiency and transparency.

Aurangzeb stressed that improving export competitiveness requires more than tax incentives.

“It is also about access to affordable financing,” he said, noting that the government has allocated a Rs71 billion subsidy to ensure exporters continue to receive financing at a concessional rate of 4.5 percent.

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“This is a major feature of the budget. Despite policy rate and inflation dynamics, exporters will have access to financing at 4.5 percent, covering financing requirements that run into trillions of rupees,” he added.

The minister also expressed optimism about the country’s export outlook, saying information technology exports are expected to reach approximately $4.5 billion, while overall goods and services exports are projected to post encouraging growth in the coming fiscal year.

Reiterating the government’s broader economic direction, Aurangzeb said the available fiscal space had been utilised to promote a pro-business and pro-growth environment.

“There is more to be done, but the direction of travel is clear—we are steadily moving towards sustainable economic growth,” he said.