The federal government has announced major relief for credit and debit card users, proposing a sharp reduction in tax on foreign transactions as part of Budget 2026-27.

Finance Minister Muhammad Aurangzeb said the tax on the use of credit or debit cards abroad will be reduced from 5 percent to 0.5 percent per transaction, easing costs for international travelers and digital payments users.

Presenting his budget speech in the National Assembly, the finance minister said it was an honour to present the third budget and thanked political leadership for their cooperation in preparing the financial plan.

He said Pakistan’s defence capability is widely recognised globally and highlighted recent military success as a defining moment in the country’s history. He also pointed to strengthened defence and strategic partnerships, including ties with Saudi Arabia, China, the United States, and Iran.

The finance minister said Pakistan’s economic growth has reached 3.7 percent, while inflation has declined and financial discipline has improved. He added that foreign exchange reserves, exchange rate stability, and international credit ratings have shown improvement, reflecting growing global confidence.

Relief measures were also announced for salaried individuals, with tax rates reduced for those earning between Rs2.2 million to Rs3.2 million annually from 23 percent to 20 percent, and from 30 percent to 25 percent for income between Rs3.2 million and Rs4.1 million.

Aurangzeb said the government has provided Rs128 billion relief on petroleum prices to protect consumers from global shocks.

He also announced reforms in taxation, privatization, energy, and digital systems, including AI-based monitoring to curb tax evasion. Efforts are underway to promote a cashless economy, expand youth employment programs, and introduce electric vehicle acceleration initiatives under the Pakistan Accelerated Vehicle Electrification Program.

Officials said the budget focuses on stability, growth, and long-term economic transformation.