PESHAWAR: The Khyber Pakhtunkhwa (KP) government on Friday announced a Rs2.119 trillion tax-free budget for FY2025-26, featuring a record Rs547 billion development outlay, a projected cash surplus of Rs157 billion, and a minimum wage increase to Rs40,000.
Finance Minister Aftab Alam Afridi presented the budget in an unprecedented session requisitioned by the government after Governor Faisal Karim Kundi withheld approval for its convening — a rare move in the province’s legislative history.
The budget includes a 10% salary hike for government employees and a 7% rise in pensions. No new taxes have been imposed, and key relief measures include a reduction in stamp duty from 2% to 1% on property transactions, exemption of property tax on plots up to 4.9 marlas, and tax waivers for green vehicles.
Federal transfers form the bulk of KP’s revenue, totaling Rs1.506 trillion, while provincial revenues are projected at Rs129 billion. Significant allocations include Rs276 billion for health (up 19%) and Rs363 billion for education (up 11%), along with Rs50 billion for higher education and Rs35 billion for health insurance.
The government reaffirmed its commitment to development in merged tribal areas, with Rs292.3 billion allocated for various initiatives despite pending inter-provincial transfers.
Afridi termed the budget people-centric and inclusive, aiming to boost economic activity without burdening citizens.
Story by Manzoor Ali
