Employees, Pensioners and Workers Get Limited Relief
The federal government has announced several public relief measures in Budget 2026-27, aiming to ease pressure on households facing rising living costs.
The relief package includes higher salaries for federal employees, increased pensions for retired workers and a rise in the minimum wage.
Serving federal government employees will receive a 7 percent salary increase. Retired employees will also get a 7 percent increase in pensions.
The federal minimum wage has been raised by 10 percent to support low-income workers.
However, the impact of these increases may remain limited in real terms because inflation is expected to average 8.2 percent during the next fiscal year.
This means many households may still feel pressure from food, transport, electricity, rent and other daily expenses.
The government has presented these steps as part of a targeted relief plan. The focus is on protecting vulnerable groups while maintaining fiscal discipline under a tight budget environment.
BISP, Housing Loans and Education Support Expanded
The Benazir Income Support Programme has received a major increase in funding.
The programme’s budget has been raised by 17 percent to Rs838 billion. It is expected to cover 12 million families during the next fiscal year.
The government has also proposed educational scholarships for 9.2 million children. This measure is aimed at helping poor families keep children in school.
Housing support has also been included in the relief package.
The PM Apna Ghar scheme will receive another Rs71 billion for the next year. The scheme will provide subsidised, low-interest mortgage loans at a fixed mark-up of 5 percent.
This measure is expected to support citizens looking for affordable housing finance.
The government says these social protection and housing measures are designed to help low-income and middle-income families manage long-term financial pressure.
However, the success of these programmer will depend on transparency, implementation and access for deserving applicants.
Salaried Class, IT Sector and Health Products Receive Tax Relief
The budget also proposes income tax relief for salaried individuals.
The government has revised tax rates for several income groups. Those earning between Rs2.2 million and Rs3.2 million annually will face a maximum tax rate of 20 percent instead of 23 percent.
People earning between Rs3.2 million and Rs4.1 million will be taxed at 25 percent instead of 30 percent.
Those earning between Rs4.1 million and Rs5.6 million will face a 29 percent tax rate instead of 35 percent.
Individuals earning between Rs5.6 million and Rs7 million will be charged a maximum rate of 32 percent instead of 35 percent.
Only those earning above Rs7 million annually will now face the highest rate of 35 percent.
The number of tax slabs will increase from six to eight. The government says this will help rationalize the tax burden across different income groups.
The budget also proposes removing the 9 percent income tax surcharge on high earners making more than Rs10 million annually.
For businesses, the government has proposed abolishing super tax for companies earning up to Rs500 million. The super tax on businesses earning above Rs500 million is proposed to be reduced from 10 percent to 8 percent.
However, this relief will not apply to banks, oil and gas companies or fertiliser manufacturers.
The real estate and construction sectors have also received relief. The government has proposed cutting withholding tax for filers by half.
Capital Value Tax on declared foreign assets is also proposed to be abolished to encourage asset declaration.
The IT and IT-enabled services sector will continue to benefit from the 0.25 percent final tax regime for exports for another three years.
The minimum tax on general exports is proposed to be reduced from 2 percent to 1.25 percent.
The government has also proposed cutting withholding tax on foreign credit and debit card transactions from 5 percent to 0.5 percent. The move aims to discourage informal payment channels.
In the health sector, sales tax and duties are proposed to be removed on sanitary pads, contraceptives and more than 100 raw materials used in cancer medicine manufacturing.
These measures are expected to improve affordability and access to essential health products.
Overall, Budget 2026-27 offers a mix of limited salary relief, expanded social protection, targeted tax cuts and healthcare support.
The real impact will depend on inflation, implementation and whether relief reaches ordinary citizens.
