PM Shehbaz Budget Tax Relief Plan Signals Big Boost for Businesses
The Shehbaz budget tax relief plan could reshape Pakistan’s economic outlook. Prime Minister Shehbaz Sharif signaled lower direct taxes in the upcoming federal budget. He said growth cannot happen by raising taxes again and again. He questioned how long the country can stretch taxpayers. Instead, he stressed the need to boost production, exports, and investment. Therefore, the focus will shift toward economic expansion.
Focus on Investment and Exports
While addressing The Pakistan Governance Forum 2026 in Islamabad, the prime minister shared his vision. He said businesses need confidence to grow. In addition, investors must feel their capital is safe. He promised to cut direct taxes across sectors. This step aims to support entrepreneurs and attract foreign direct investment. As a result, the government hopes to expand opportunities for everyone.
At present, Pakistan’s tax to GDP ratio stands at 10.5%. However, he emphasized widening the tax net instead of burdening existing taxpayers. He also called for reducing indirect taxes in the new fiscal year.
Stabilizing The Economy
The prime minister recalled the tough days of June 2023. At that time, Pakistan stood close to default. However, coordinated efforts helped stabilize the economy within two years.
Inflation dropped from around 35% to under 7%. Meanwhile, the policy rate came down to 10.5%. He credited teamwork between federal and provincial governments, along with institutional support. He added that several reforms were homegrown. According to him, these steps aimed to prevent the boom and bust cycle.
Power Reforms and Governance Changes
The government reduced electricity prices by Rs9 per unit. At the same time, it protected solar investments. However, power theft still costs about Rs200 billion. He supported closing loss making entities like Utility Stores Corporation and the Pakistan Public Works Department. These reforms, he said, saved billions. Under the Ramazan Package, Rs38 billion is reaching deserving families through digital wallets. This method ensures dignity and transparency. Finally, he stressed that governments should facilitate businesses, not run them. Together, he said, Pakistan can claim its rightful place in the global economy.
