PESHAWAR: The Khyber Pakhtunkhwa (KP) government has decided to present a balanced budget instead of a surplus budget for the next fiscal year, according to the provincial Finance Department.
The total size of the KP budget is expected to reach Rs2.3 trillion, with development spending likely to increase. According to the Finance Department, the provincial government has decided not to present a surplus budget for the upcoming fiscal year.
Officials said the decision was taken because the federal government has not yet finalized the new National Finance Commission award. The Finance Department said the province cannot prepare a surplus budget due to the non-consolidation of the new NFC award by the federation.
The total volume of Khyber Pakhtunkhwa’s provincial budget for the next fiscal year is expected to be around Rs2.3 trillion. Officials said the federal government has not yet clarified the key features of the next fiscal year’s budget. This uncertainty has affected provincial budget planning, especially because KP depends heavily on federal transfers.
According to the Finance Department, more than 90% of Khyber Pakhtunkhwa’s annual budget depends on federal distributable revenue. Officials said this reliance on federal receipts is a key factor behind the decision to prepare a balanced budget rather than a surplus one. The province is waiting for clarity from the federal government on budgetary features and revenue distribution.
The Finance Department said the size of the Annual Development Programme is expected to increase in the next budget. The ADP volume is likely to rise from Rs547 billion to Rs590 billion. This increase indicates that the provincial government plans to maintain focus on development projects despite fiscal constraints.
Good news for buyers? Mobile prices may ease in new fiscal budget
Moreover, Mobile phone prices in Pakistan could see a reduction in the upcoming federal budget if proposed changes to import taxes are approved, according to reports ahead of the fiscal plan for 2026–27.
The federal budget, which is anticipated to be presented on June 5 after negotiations between the government and the IMF, will include a reduction in mobile phone taxes from 25% to 18%.
It is understood that officials will consider retaining the same Pakistan Telecommunication Authority (PTA) taxation for premium imported mobile phones. However, there is also the possibility that the tax will be reduced to 18%, meaning that smartphones will become cheaper.
In particular, a tax reduction might be most beneficial for imported smartphones that cost more than $500, like Apple’s and Samsung’s flagship products.
Although the decrease in tax rate can prove helpful for consumers, smartphone producers in Pakistan are unlikely to welcome such measures because they are likely to intensify competition due to imported products.
According to the PTA, mobile phones that enter the country illegally are subject to restrictions. Only those smartphones will have all necessary functions unlocked if applicable import duties are paid.
If no reduction in import taxes is announced, smartphone prices especially flagship models are expected to remain high, continuing the affordability challenge for many consumers in the local market.
The final decision is expected when the federal budget is unveiled next week.
