- In budget 2025-26 carries no new capital taxes, startup incentives and digital reforms aim to attract investment
Interview with Mr Hamad Rasool Bhullar, an analyst
PAGE: Tell me something about yourself, please:
Hamad Rasool Bhullar: I have been working for both the private and public sectors over the last about 35 years in multiple roles with almost 28 years in professional trainings. With respect to my work with the financial sector, I have been involved in research and training for almost 28 years so far, and conducted over 350 trainings on different aspects of Finance, Business Ethics, Audit and Corporate Governance from basic concepts to professional applications in Projects Finance, Shariah Compliant risk management, investment management and Financial Analysis etc. In addition to the freelance consultancy and Financial Advisory in these fields, I remained a non-executive member on the Board of an Investment Bank for almost 4 years. My qualifications and experience have mainly been in Accountancy, Corporate Law, IT, Economics, Corporate Finance and Islamic Finance, Takaful, Business Turnarounds, Projects Finance, Audit & ethics with Trainings and business advisory in multiple areas of Corporate Sector as well as Public Sector within and outside Pakistan. I have a privilege to have issued the first Sukuk in Pakistan’s Investment Canvas with some other very first initiatives in the financial sector in Pakistan.
PAGE: What impact could the Federal Budget 2025-26 have on the economy of Pakistan?
Hamad Rasool Bhullar: Generally, it is expected that the budget aims to balance IMF commitments with domestic priorities, but some experts feel it plays it safe rather than transformative. As usual this budget is also putting some additional taxes on the common man but luckily though little, but some relief has been given to the salaried class and real estate sectors. This process will keep the inflation in check; Budget deficit is expected at 3.9% of GDP with a reduced Debt-to-GDP Ratio from 74% to 70%. Although initially Federal PSDP was expected to be Rs. 1,400 billion against the actual allocation of Rs 1,000 billion.
PAGE: Which sectors of the economy have been given preferences in the Budget?
Hamad Rasool Bhullar: There are mixed sentiments as digital & ICT sector got to be some major push for startups, cybersecurity, and broadband access as a flagship Rs5 billion for PM’s IT startup initiative has been kept.
In BISP Rs716B showing a 21% increase, agriculture loans Rs2,066B including interest-free options for small farmers is good news, education & health sectors as usual very meagre.
Climate related tagging Introduced under IMF’s Resilience and Sustainability Facility, Rs603B allocated for mitigation of (clean energy), but only Rs85B for adaptation and resilience is raising concerns about skewed priorities.
PAGE: What is your standpoint about the taxation measures taken in the Budget?
Hamad Rasool Bhullar: Digital economy & e-commerce gets 18% sales tax on online shopping and COD transactions with mandatory tax collection by online retailers. An 18% GST on imported solar panels was slapped which has later been reduced slightly on backlash. Property & real estate federal excise duty on plot transfers (previously 3–7%) has been abolished with a reduced advance tax on property purchases for filers. Increased advance tax on cash withdrawals for non-filer is a step towards economy documentation but may cause reduced bank deposits. Salaried class has 1% income tax on Rs1.2M annual salary (tax-free slab unchanged at Rs600K) 2.5% relief across all income tax slabs.
Overall, we can say that the tax base has been broadened by targeting digital and informal sectors, documentation being encouraged through stricter enforcement and digital invoicing. Although small but reduces tax burden for salaried class and property filers, signals a fiscal discipline, aligning with IMF Promotes housing through targeted tax credits.
On the other hand, solar tax seems regressive, discouraging clean energy adoption, e-commerce tax may stifle small online businesses and startups, Over-reliance on indirect taxes could disproportionately affect lower-income groups. Enforcement-heavy approach risks harassment without proper checks, Limited relief for existing taxpayers; symbolic rather than substantial.
PAGE: How do you see the investment scenario in the wake of the Budget?
Hamad Rasool Bhullar: We can see some positive signals for Investors as macroeconomic stability bringing more predictable economic environment as no New Taxes on Capital Gains or Dividends may stabilise capital market shows a green light for equity investors, helping to maintain momentum in the stock market. Sectoral incentives as construction & housing, and technology & startups with a focus on cybersecurity and broadband expansion, could attract venture capital and FDI. Green Sukuk and climate-tagged projects may draw ESG-focused investors and multilateral funding.
The challenges & risks may be high debt servicing burden, regulatory overreach while digital audits and enforcement aim to improve compliance, overregulation could deter SMEs and informal sector investors if not balanced with transparency. The imposition of GST on solar imports raised concerns about the government’s commitment to clean energy, potentially dampening green investment sentiment. Geopolitical & security concerns brings record defence budget, regional tensions and internal security remain key variables for long-term investor confidence.
Overall Investor Outlook seems
- Domestic investors may find opportunities in construction, fintech, and agriculture-linked industries.
- Foreign investors will likely adopt a wait-and-see approach, watching for consistency in policy execution and macroeconomic indicators.
In short, the budget sets the stage for measured optimism, But the real test lies in implementation and institutional reforms.