KP govt tables Rs2,119bn budget, relying heavily on Centre

PESHAWAR: The Khyber Pakhtunkhwa government on Friday presented the Rs2,119 billion budget for FY 26 (fiscal year 2025-26), with an estimated share of Rs1,506.929 in federal revenue.

According to the budget documents, the Khyber Pakhtunkhwa government expects to generate Rs129 billion as provincial revenue.

On the other hand, the budget mentions a total expenditure of Rs1,962, out which the development projects get share of Rs547 billion.

Khyber Pakhtunkhwa Minister for Law and Finance Aftab Alam presented the budget before the House, before which the opposition members staged a strong protest and chanted slogans against the government in the presence of Chief Minister Ali Amin Gandapur.

The budget documents show that the province has opted for increasing the cement royalty, which will generate Rs7.2 billion in revenue.

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At the same time, it is expected that the Khyber Pakhtunkhwa Revenue Authority will manage an increased collection of Rs4.8 billion in different services.

TAXATION

As far as the commercial and residential properties are concerned, the government has exempted the owners of up to 4.9-marla plots. Meanwhile, the hotel bed tax is reduced to 7 per cent from the current level of 10 per cent.

On the other hand, people with a monthly income of up to Rs36,000 won’t have to pay the professional tax.

Another exemption is for environment-friendly electric vehicles. There won’t be any registration or token fee for these.

At the same time, no new tax has been imposed on the erstwhile tribal regions – Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA).

Earlier, the federal government decided to introduce 18 per cent GST in the federal budget on the goods manufactured in former FATA and PATA regions with effect from July 1, 2025. The reasoning behind this move is that the manufacturers in these regions enjoy an additional advantage against their competitors from other parts of Pakistan.  

PAY AND PENSION

The budget proposals has suggested a 10 per cent increase in the basic pay of serving government employees and a 7 per cent hike for the pensioners.

At the same time, the disparity reduction allowance (DRA) has been hiked from 15 to 20 per cent.

Unlike the Centre, the Khyber Pakhtunkhwa government has also raised the minimum wage from Rs36,000 to Rs40,000.

EAUIPMENT FOR POLICE

In the budget 2025-26, the Khyber Pakhtunkhwa government has allocated Rs13 billion to procure arms, vehicles and other equipment for the police.

The move comes as the provincial ruling party has been facing severe criticism for not providing the police with necessary weapons and equipment to fight the terrorists. It is despite the fact that the law enforcers in Khyber Pakhtunkhwa are on the frontline amid the rising acts of terrorism.

In his budget speech, the finance minister said they decided to bring the salaries of police from constables to inspectors in Khyber Pakhtunkhwa at par with their peers in Punjab.

Moreover, the martyrs package for low-ranking policemen is enhanced to Rs11 million and for the officers to Rs21 million.