• Party think tank seeks Rs1.2 million exemption threshold for salaried individuals
• Calls for abolishing the super tax and reducing GST to 15pc
• Demands capping petroleum levy at Rs50 per litre
ISLAMABAD: In a shift from its earlier stance of non-engagement, the Pakistan Tehreek-i-Insaf has unveiled its budget proposals for 2026-27, calling for relief to the salaried class, sharp reductions in government expenditure and wide-ranging reforms to what it describes as a fiscal framework that has burdened taxpayers without ensuring economic stability.
The PTI’s economic think tank has now released a detailed 15-page set of recommendations for consideration in the upcoming budget. This marks the party’s first formal set of budget recommendations since its ouster through the 2022 no-confidence vote.
The recommendations were prepared under the leadership of former KP finance minister Taimur Jhagra, who heads the party’s economic think tank. The exercise also includes input from PTI MNAs Rana Atif, Osama Mela and Mobeen Jutt, all of whom served on the National Assembly’s finance committee in the previous parliamentary year.
Explaining the rationale behind the exercise, Taimur Jhagra said the objective was to demonstrate that the PTI continues to offer a credible economic alternative while allowing the public to compare the government’s approach with the opposition’s policy direction.
“This is why we have created a think tank within the PTI that can provide practical analysis on economic issues, guide policy discussion and educate the public,” Mr Jhagra said while addressing a news conference held to release the document.
At the core of the recommendations is a call for significant income tax relief, particularly for salaried individuals. The PTI has suggested raising the minimum taxable income threshold from Rs600,000 to Rs1.2 million annually, with automatic indexation to inflation to protect real incomes from erosion.
The document also recommends rationalising tax slabs to ease the burden on middle-income groups, alongside the removal of surcharges on higher earners. It argues that a more balanced tax structure would not only provide relief but also encourage greater documentation of income and reduce incentives for tax evasion.
On the corporate side, PTI proposes abolishing the super tax and gradually reducing the corporate tax rate to 25pc over three years to improve competitiveness. It also recommends eliminating the capital value tax on foreign assets to encourage wealth declaration and reversing certain taxes that discourage investment, including restoring incentives for mutual funds.
Inflation and documentation
To tackle inflation, it recommends a phased reduction in the general sales tax to 15pc and capping the petroleum levy at Rs50 per litre. It also calls for reinstating sales tax exemptions on essential goods such as medicines, milk and agricultural inputs, alongside removing advance taxes on electricity for low-consumption households.
The recommendations place strong emphasis on expanding the tax net rather than increasing rates. They propose bringing the retail sector into the formal tax regime, revising the turnover threshold for small and medium enterprises from Rs250 million to Rs500m, and rationalising advance tax mechanisms that currently strain business cash flows.
In a bid to support exports, the document recommends eliminating the advance export tax and extending the final tax regime for information technology exports until 2035. It notes that policy stability is critical for sustaining growth in the IT sector, which it identifies as a key source of foreign exchange.
Beyond revenue measures, the PTI proposes capping the growth of the public-sector wage bill, reforming the pension system through contributory mechanisms, and monetising perks such as housing and transport to unlock public assets. It estimates that expenditure reforms, including pension restructuring, could generate savings of up to Rs500bn annually.
The party also calls for consolidating government cash balances into a single treasury account to improve fiscal management and reduce reliance on borrowing. It stresses the need for visible austerity measures, including cuts in discretionary spending and official perks.
On the development side, it advocates greater transparency in public spending, faster release of development funds, and a reorientation of the Public Sector Development Programme towards capital formation rather than recurring administrative costs.
The PTI also called for universal health insurance coverage, increased funding for higher education, and a coordinated national strategy on education and population growth. In the energy sector, it urged reforms to reduce transmission losses, rationalise tariffs and align generation capacity with demand.
Published in Dawn, June 6th, 2026