Attention has turned to a developing story after the federal budget for the upcoming fiscal year ( FY26-27) is set to be presented in the upper and lower houses of the Parliament today. Finance Minister Muhammad Aurangzeb is expected to present the financial plan in the National Assembly at 3pm, and later in the Senate, according to Parliamentary Affairs Minister Tariq Fazal Chaudhry.

Key Plays

What is happening now can be traced back to a series of decisions and events that preceded it.

The coalition government is set to unveil fresh tax measures worth Rs660 billion to Rs700bn in the budget, according to a Dawn report.

In contrast to the broader revenue measures, the budget carries highly targeted good news for mid- and upper-level income earners.

Against this backdrop, significant relief is planned for salaried individuals earning between Rs230,000 and Rs341,000 a month in the upcoming budget, but a large segment of those making between Rs100,000 and Rs183,000 per month may not see any change, official sources said.

* PM Shehbaz has reported that the government was taking measures to bring the informal economy into the tax net.

Top Performers

Reactions from key figures have helped frame what this development could mean.

The government last week unveiled the ‘ Fixed Tax Asaan Scheme ’ to bring small traders and shopkeepers into the tax net, with an annual turnover of up to Rs200 million.

Compounding the significance of these events, it is reportedly also considering relaxing the remittance cap in the upcoming budget, as overseas Pakistanis in several countries have complained of difficulties in protecting their investments and liquid assets abroad.

Further developments have shed additional light on the matter. until last week, the federal government, its coalition partners and provincial governments had been struggling to reach a consensus over the Centre ’ s demand for more than Rs1 trillion for strategic needs.

According to those with knowledge of the situation, however, the ruling PML-N and its major ally, the PPP, on Monday reached a broad agreement to cut development and other expenditures at all tiers of the federation to cover a shortfall of around Rs800bn in revenue this year and jointly create similar, but higher, fiscal space next year for additional “ strategic needs ”.

The Stats

This development is likely to influence decisions and discussions in the weeks ahead.

Under the agreement, provincial shares from the federal divisible pool would stay frozen at the current fiscal year ’ s position.

According to those with knowledge of the situation, the Country-wide Economic Council ( NEC), the highest economic decision-making forum of the federation, has set the federal and provincial development budget at Rs3.218 trillion for FY26-27.

It has also emerged that it trimmed the federal and provincial uplift plans cleared by the Annual Plan Coordination Committee ( APCC) by Rs1.046tr.

Reports further indicate that punjab ’ s development plan was chopped by almost half, or 49pc, the biggest cut among all stakeholders, while Balochistan ’ s Rs308bn plan remained unaffected.

Next Up

This remains an active and fast-moving story. With significant stakes and wide-ranging implications, the next few days are expected to bring greater clarity on several outstanding questions.