Pakistan FY27 budget to bring limited relief for salaried class: report

Pakistan's FY27 federal budget is likely to offer limited relief to salaried individuals while keeping a tight fiscal stance under the International Monetary Fund (IMF) program.

Brokerage Topline Securities said in a budget preview report that the government may relax income tax slabs or rates for salaried workers, despite fiscal constraints, given rising inflation.

Will Pakistan's FY27 budget give relief to the salaried class?

Pakistan's FY27 budget may include limited relief for salaried individuals, such as relaxed income tax slabs or lower rates.

Topline Securities said such relief cannot be ruled out despite fiscal constraints, citing rising inflation. Similar measures featured in the previous budget. Broad cuts remain unlikely because of strict IMF revenue targets.

The relief is constrained by Pakistan's commitments under the IMF program. The government has pledged to keep the primary fiscal surplus at 2% of GDP.

Will Pakistan cut the super tax in FY27?

Proposals are being discussed to reduce the Super Tax rate on corporations from the current 10%. Topline believes the chances of such relief in FY27 remain low.

The government could instead announce a phased reduction in Super Tax from FY28. The move would signal that temporary fiscal tightening measures may gradually be rolled back as stability improves.

What other tax measures are under discussion?

The report referred to discussions on reducing Pakistan Telecommunication Authority registration taxes on imported mobile phones to promote digitization. Topline described the likelihood as low.

Concerns over protecting local manufacturing, employment, and forex reserves weigh against the move. Topline also does not expect restoration of zero-rating or the final tax regime for textile exporters.

Which relief measures are likely to continue?

The brokerage expects the prime minister's housing finance subsidy scheme to continue in FY27. Inflation-linked adjustments in the Benazir Income Support Program and minimum wage are also highly likely.

Continuation of the final tax regime for IT exporters appears likely. Reductions in sales tax on packaged milk and removal of taxes on property transactions remain unlikely.

How will the FY27 budget affect Pakistan's economy and markets?

The FY27 budget is expected to reinforce fiscal stability amid geopolitical uncertainty and high global oil prices. These continue to pose risks to Pakistan's fiscal and external accounts.

The government has committed to restricting the primary fiscal surplus to 2% of GDP. It will also limit growth in most primary current expenditures to the projected inflation rate of 8.4%.

Topline expects the budget to be broadly neutral for the stock market. Any increase in taxes on capital gains or dividends could hurt investor sentiment in the short term.

The brokerage maintained its December 2026 target of 203,000 points for the benchmark index. Prolonged US-Iran tensions and high oil prices could cut that target to 187,000 points.