ISLAMABAD – A leading private think tank has sharply criticized the Pakistan federal budget 2025-26, calling it a plan with “misaligned” spending priorities and “overly ambitious” money-making goals. The report argues that instead of making real changes, the new budget puts even more pressure on the people and businesses who already pay taxes, without bringing new people into the tax net.
The analysis comes from the Pakistan Institute of Development Economics (PIDE), which released a detailed report on the government’s financial plan. Their findings suggest that the budget is more of the same old approach, rather than the major reform that many experts believe is needed to fix the country’s economic problems.
This criticism is significant because it highlights a major debate in Pakistan: how to increase the country’s income without hurting the existing formal sector of the economy.
What’s Wrong with the Budget? Budget 2025-26: A Burden on Taxpayers?
According to the PIDE report, the Pakistan federal budget 2025-26 has several major flaws. The think tank points out that the government’s plan to collect a huge amount of new taxes is unrealistic and will likely fail.
Key Criticisms of the Budget:
- No Real Reforms: The report says the budget doesn’t include any meaningful changes to how the government spends money or collects taxes. It’s described as a “business-as-usual” budget.
- Unrealistic Tax Goals: The government hopes to collect a massive Rs12.9 trillion in taxes, a goal the report calls “overly ambitious.” PIDE warns that this target will be very difficult to meet.
- More Burden on the Formal Sector: Instead of finding new ways to get the untaxed parts of the economy to pay their share, the budget increases the burden on salaried individuals and established businesses. As the report states, there is a continued “reliance on easily collectible direct and indirect taxes from the formal sector.”
- Wrong Spending Priorities: The report also criticizes how the government plans to spend its money, suggesting that the priorities are “misaligned” with what the country actually needs.
The Impact on Salaried People and Businesses | New Budget, Same Old Problems?
One of the biggest concerns raised by experts on platforms like X is the increased pressure on the formal economy. The Pakistan federal budget 2025-26 introduces higher taxes for salaried employees and businesses that are already documented and paying taxes.
Critics, like those cited in reports from The Express Tribune, argue that this approach discourages growth and investment. When existing taxpayers are squeezed harder, it can make it more difficult for businesses to expand and create new jobs.
The main argument is that the government should be focusing on broadening the tax base—that is, finding ways to include the many businesses and individuals who currently operate outside the tax system.
How the New Budget Affects You?
The government will now have to defend its Pakistan federal budget 2025-26 in parliament and against the criticism from economic experts. The coming weeks will show whether they can convince the public and the international community that their plan is the right one for the country.
For now, the message from think tanks like PIDE is clear: without real, deep-rooted reforms, Pakistan’s economy will continue to face the same old problems, and the burden will continue to fall on those who are already paying their share.
