Govt plans over Rs1 trillion development budget for FY25-26

ISLAMABAD: The federal government will allocate over a trillion for the development budget in the upcoming fiscal year 2025-26, with preparations underway for the Annual Plan Coordination Committee (APCC) meeting scheduled for June 2, ARY News reported citing sources.

The proposed development budget of Rs1, 065 billion on uplift projects, with Rs170 billion for the National Highway Authority (NHA) and Rs140 billion for water resources projects.

According to sources, the Power Division is set to receive Rs105 billion, while Rs50 billion is proposed for higher education initiatives.

They added that the development budget of Rs4 billion is suggested for National Food Security projects, Rs3 billion for the Ministry of Information and Broadcasting, and Rs3 billion each for industry and production sectors.

The sources said that further allocations include Rs3.5 billion for maritime affairs and Rs1.5 billion for inter-provincial connectivity projects.

The sources confirmed that the proposals will be presented for approval at the Annual Plan Coordination Committee meeting, aiming to bolster infrastructure and economic growth across various sectors in the next fiscal year.

Meanwhile, Pakistan is in talks with the International Monetary Fund (IMF) to address concerns over imposing income tax on the salaried class while meeting revenue targets

According to sources, during virtual budget discussions, the IMF questioned how Pakistan would achieve its tax collection goals if tax relief is provided to salaried individuals.

The Federal Board of Revenue (FBR) briefed the IMF on measures to meet these targets, but the lender insisted on eliminating all sales tax exemptions and concessions to boost revenue.

The IMF has proposed imposing an 18% sales tax on solar panel imports and a 1.5% withholding tax on all imported goods, with exemptions limited to raw materials used by industries, according to sources.