Tax-Free Budget & ADP Growth

What is meant by a tax-free budget under Maryam Nawaz’s government?

Under Maryam Nawaz Sharif’s provincial leadership in Punjab (Pakistan), a “tax‑free” or “zero‑tax” budget refers to a fiscal plan in which no new provincial taxes are introduced and no existing provincial tax rates are increased for that year. That is exactly what was announced in the Punjab Budget for the fiscal year 2025‑26, unveiled on June 16, 2025 and passed by the Assembly on June 27, 2025.

What that means in practice:

Zero new taxes imposed: No new direct or indirect taxes were added across sectors—industry, agriculture, transport, education, etc.
No increase in existing tax rates – previously levied taxes remained unchanged during this budget year
Instead of raising rates, the government pledged to expand the tax base through better compliance, property valuation reforms, digitisation, and enforcement by the Punjab Revenue Authority.

Major features that accompanied the tax‑free budget:

Record development spending (Annual Development Programme – ADP) increased by some 47% to PKR 1.24 trillion—largest ever in Punjab's history.
Focus on improvements in education, health, infrastructure, welfare, including free medicines, laptops to students, minimum wage raised to PKR 40,000, and large-scale road construction.
Fiscal discipline was emphasised: government operational spending rose by only around 3%, debt borrowing was slashed by 94%, and a projected surplus of PKR 740 billion was expected—even while meeting IMF conditions.

Summary in one sentence:

The “tax‑free” Punjab budget under Maryam Nawaz means no new taxation or rate hikes, paired with large development and welfare spending financed through revenue enhancement and sound financial management—not increased levies on the public.

Why did CM Maryam Nawaz decide to present a tax-free budget in Punjab?

Chief Minister Maryam Nawaz Sharif opted for a tax‑free budget for Punjab’s fiscal year 2025–26 (presented on June 16, 2025 and passed on June 27, 2025) for several interconnected political and economic reasons:

Deliver “People-friendly,” populist relief

She and her provincial ministers framed the zero‑tax budget as a direct benefit to taxpayers and businesses—ensuring no new taxes were imposed, nor existing rates raised—to provide immediate relief amid inflationary pressures and economic hardship. Punjab Information Minister Azma Bokhari said she rejected multiple departmental proposals for tax hikes to protect public interest, especially the salaried class.

Emphasise a development-first, pro‑welfare agenda

Rather than fiscal contraction, the budget prioritised record development spending—with a 47% jump in the Annual Development Programme (ADP) to Rs 1.24 trillion, the largest ever—investing heavily in infrastructure, education, health, rural uplift and social protection.

She explicitly stressed closing the urban–rural development gap, promising to transform around 1,800 villages into model villages under new initiatives like the Punjab Development Project.

Promote good governance and fiscal discipline

Maryam Nawaz highlighted her government's performance, pointing to zero financial scandals, stronger e‑tendering and transparency systems, and significantly reduced borrowing (by 94%), while projecting a surplus of Rs 740 billion despite expanding ADP funding—showcasing fiscal management under IMF-aligned constraints.

Leverage political branding and constituency-building

The "Awam Dost" (people‑friendly) narrative and visuals of high-impact welfare schemes—like free medicines, laptops for students, an increased minimum wage of Rs 40,000, and healthcare investments—reinforced Maryam Nawaz's reformist, public-first political image.

Bottom Line:

CM Maryam Nawaz Sharif pursued a budget with no tax hikes to offer public relief, build her reformist reputation, maintain growth-friendly fiscal settings, and invest heavily in development—all while projecting governance that is transparent, disciplined, and citizens‑first.

What are the main highlights of Punjab’s tax-free budget 2024–2025?

Here are the main highlights of Punjab’s tax‑free budget for FY 2024–25, presented by the provincial government led by Chief Minister Maryam Nawaz (Finance Minister: Mian Mujtaba Shuja‑ur‑Rehman) on June 13, 2024, and approved by the Assembly on June 27, 2024:

Overview

Total budget outlay: Rs 5.446 trillion
Tax policy: No new taxes; no increase in existing provincial tax rates—hence termed “tax‑free”
Revenue target: Rs 960 billion (≈53% increase in own‐source revenue), with collection targets set for PRA, Board of Revenue, Excise Department; supported by NFC federal share of approx. Rs 3,683 billion.
Social & Welfare Measures
Health

Rs 539 billion allocated for healthcare delivery
Initiatives included Clinic‑on‑Wheels (200 mobile units), air ambulance service (Rs 400 million), new cancer and cardiology institutes in Lahore and Sargodha, and Rs 9.5 billion for solar systems to low-usage households (Roshan Gharana programme).

Education

Rs 669.7 billion set aside, including development and current funding
Special initiatives: Honhaar/undergraduate scholarships (~Rs 2.5 billion), laptop scheme (Rs 6–10 billion), school upgrade programmes, support for higher education, special education and Danish schools.

Social Protection & Subsidies

Rs 130–165 billion for subsidies and social support
Agriculture subsidies (~Rs 47 billion), transport fare relief, free medicine & health support (~Rs 79.5 billion), Ramzan food packages (~Rs 25 billion), municipal grants (~Rs 20 billion), and other poverty alleviation measures (~Rs 70 billion).

Salaries, Pensions & Wages

Government salaries: Rs 603 billion (up 20–25% increase depending on grade)
Pensions: Rs 451 billion (approx. 15% hike)
Minimum wage: Raised from Rs 32,000 to Rs 37,000 per month.

Agriculture Support & Environment

Kissan Dost package: Rs 75 billion in interest‑free loans to 500,000 farmers
Agricultural innovations: Rs 30 billion for green tractor scheme, Rs 9 billion for solarising 7,000 tube wells, Rs 1.25 billion for model agri‑malls, Rs 2 billion for livestock cards, and Rs 8 billion for shrimp farming & fish markets.

Climate & Environment

SMOG Less / Climate Resilient Punjab: Rs 10 billion
Plant for Pakistan (tree plantation): Rs 8 billion.

Housing & Infrastructure

Apni Chat Apna Ghar Scheme: Rs 10 billion for low‑income housing
Funds allocated for Muree development, local roads, waste management (Himmat/Nighaban cards programmes), Multan Safe City, and garment industry promotion (Garment City, Rs 3 billion).

Fiscal Outcome & Governance

Projected surplus: Rs 630 billion—revenue growth and discipline compensated for large outlay.
Emphasis on boosting provincial tax‑to‑GDP ratio (target ~13% over three years) without burdening public via higher tax rates.
Operational reforms: digitisation, better transparency, reduced debt servicing, and repurposing funds (e.g., wheat debt retirement ~Rs 375 billion).

In Summary

Punjab’s FY 2024–25 tax‑free budget was a bold, people‑centric fiscal strategy—a blend of zero new tax burden, accelerated development investment, substantial welfare and agricultural assistance, increases in public sector compensation, and a surplus-driven financial discipline narrative aimed to promote economic relief and developmental progress without fiscal pressure on citizens.

How will the tax-free budget impact low-income and middle-class families in Punjab?

The tax-free budget for FY 2024–25 in Punjab under CM Maryam Nawaz’s leadership is designed to have direct, tangible benefits for low-income and middle-class families. Here’s how it is expected to impact them:

Positive Impacts

1. No new taxes = No added burden

No increase in GST, property tax, professional tax, or other provincial levies means cost of living doesn't rise due to government policy.
Middle- and lower-income families, already strained by inflation, won’t face new direct or indirect taxes on their earnings or consumption.

Increased wages and income support

Minimum wage increased to Rs 37,000 per month (up from Rs 32,000).
Government employees’ salaries raised by 20–25%, which directly supports many middle-class families.
Pension increases (15%) help elderly citizens and families relying on retired public sector income.

Health relief for all

Free medicines in public hospitals (Rs 79.5 billion allocated) help poor families avoid out-of-pocket expenses.
Clinic-on-Wheels and air ambulance services increase access to healthcare in rural and underserved areas.
New hospitals and health institutes offer long-term relief through improved services and reduced medical costs.

Education access and student support

Laptop Scheme (Rs 10 billion) helps middle-income students bridge the digital divide.
Honhaar undergraduate scholarship programme (Rs 2.5 billion) supports meritorious students from low-income backgrounds.
Investment in school upgrades and teacher training improves the quality of public education available to all.

Targeted subsidies and social protection

Ramzan relief package (Rs 25 billion) helps poor families with food support during the holy month.
Roshan Gharana programme provides solar systems for households using under 100 units of electricity, cutting energy bills for the poorest.
Subsidies on fertilizer, tube wells, green tractors, and livestock support benefit rural poor and subsistence farmers directly.

Housing & utility support

“Apni Chat Apna Ghar” low-cost housing scheme (Rs 10 billion) assists families with affordable home ownership.
Municipal grants and urban service improvements (waste, roads, water) improve living conditions in working-class neighborhoods.

Potential Limitations / Challenges

Implementation & reach: Benefits depend on efficient delivery; if poorly administered, lower-income groups may be underserved.
Inflationary pressures: Though the budget is tax-free, non-government factors (fuel, dollar rate, private sector pricing) can still hurt household budgets.
Indirect taxes (federal): The provincial budget doesn't control federal taxes (e.g., sales tax, fuel levy) that still affect middle-income families.

Bottom Line:

The tax-free budget reduces financial pressure on households by avoiding new taxes, while expanding health, education, and subsidy programs that directly benefit low- and middle-income families. It aims to preserve real incomes, expand access to services, and create inclusive economic space—but success will depend on transparent, timely execution.

Were any new taxes imposed in the 2024–2025 budget?

No — the Punjab provincial budget for fiscal year 2024–25 did not impose any new taxes, nor did it increase existing tax rates. It was officially designated a “tax‑free” budget, despite implementing structural changes in valuation methods and fee levels to enhance revenue collection.

Key Points:

1. “Tax-free” status

The government reaffirmed that no additional taxes were introduced, and existing tax slabs remained unchanged, maintaining the core principle of the tax‑free budget ethos.

Fee adjustments rather than new taxes

Although no new taxes were introduced, the Finance Bill included amendments to valuation methods and fee structures to modernize and boost revenues:

Property tax regime was shifted from a rental-based system to a capital value model. Self-assessment was introduced, meaning residential properties valued up to Rs 5 million became tax‑exempt, while higher-valued properties were now included in the tax net.

Motor vehicle token taxes were reassessed based on vehicle invoice price instead of engine capacity. A lifetime token tax was proposed for subsequent owners with a 10% depreciation each year over ten years.

Increases in fees for court services (Court Fees Act) and stamp duties (Stamp Act) were enacted to adjust for historical inflation and address revenue shortfalls—e.g. court fees raised from Rs 1,500 to Rs 5,000 and stamp duties from Rs 1,200 to Rs 3,000.

Excise duty on mining industry cess was raised significantly—from Rs 1–5 per tonne to Rs 30–50 per tonne—for labor welfare funding.

Bottom line:

Although no new taxes were introduced in the 2024–25 Punjab provincial budget, the government did introduce valuation reforms and fee hikes across sectors (notably property, vehicle, court, and stamp duties) to expand the tax base and raise revenues. These changes were framed not as new taxes but as updates to outdated fee structures and valuation methods, while preserving the label “tax‑free” from a direct tax‑rate perspective.