Provincial ministers announced on Wednesday that Punjab has experienced a significant increase in tax revenue, with collections rising between 35 and 40 percent over the last two years. This surge has enabled the government to present an annual budget free of deficits, notably without imposing any new taxes on consumers.
At a post-budget press conference in Lahore, Punjab Finance Minister Mujtaba Shuja-ur-Rehman revealed that the government aims for a consolidated tax revenue growth of 47 percent for the fiscal year 2026-27. This target is set to be achieved by addressing existing system inefficiencies rather than broadening the tax base to include new sectors.
On Tuesday, the provincial cabinet approved a Rs5.34 trillion budget described as “tax-free” for the upcoming financial year. The budget relies heavily on transfers from the federal divisible pool and administrative reforms to maintain fiscal balance.
Rehman emphasized that the government has optimized current tax collection methods instead of introducing fresh levies. He highlighted that the provincial excise department exceeded its annual revenue target by 12 percent. Additionally, non-tax revenues from the mining and minerals sector are expected to generate over Rs30 billion.
To ease the economic burden on citizens and local businesses, the Board of Revenue’s tax collection goals were deliberately set lower, Rehman, as part of a strategy to provide targeted relief.
Meanwhile, Punjab Senior Minister Marriyum Aurangzeb used the briefing to contrast the current economic progress with the crisis faced when Prime Minister Shehbaz Sharif took office. She noted that the country was on the verge of sovereign default at that time and credited the federal economic team’s adherence to International Monetary Fund (IMF) conditions for the ongoing stabilization.
“Economic stability is gradually returning due to tough fiscal decisions,” Aurangzeb stated. She also pointed out significant cost-cutting measures in Punjab, including the elimination of 870 redundant development projects and the removal of 100,000 vacant bureaucratic posts to reduce public spending.
Despite a 3.2 percent reduction in the overall budget size compared to the previous year, Aurangzeb assured that funding for critical social programs, healthcare, education, and the “Saaf Suthra Punjab” environmental campaign remains intact.
She further detailed that the province’s annual development programme (ADP) is set at Rs752 billion, with provincial tax revenues projected at Rs519 billion. The Punjab Revenue Authority (PRA) is expected to contribute Rs370 billion to this total.
Addressing political critiques over federal grants, Aurangzeb dismissed concerns, emphasizing Punjab’s continued significant role in supporting the federation’s fiscal health.
She also highlighted ongoing public welfare initiatives, noting that 600 urban transit buses have already been delivered out of a planned 2,000, and 160,000 interest-free micro-loans have been distributed to citizens.
