Overseas Pakistanis get some incentives in Federal Budget 2025

Dubai: In a notable shift toward recognising the vital role of overseas Pakistanis, the government of Pakistan unveiled a series of initiatives in the Federal Budget for FY2025—26 aimed at better engaging and supporting its diaspora.

Despite an overall 7% reduction in federal spending, bringing the total outlay to Rs7.57 trillion ($62 billion), Pakistan Finance Minister Muhammad Aurangzeb devoted a significant portion of his speech to lauding overseas Pakistanis, calling them the country’s “most valuable asset.”

Remittances from overseas Pakistanis reached a record $31.2 billion in the first 10 months of FY2024—25, marking a 31% increase year-on-year. “This historic surge is $10 billion higher than two years ago and it has significantly improved our current account and is a testament to the unwavering commitment of Pakistanis abroad,” said Aurangzeb.

Positive step

Shabbir Merchant, Chairman of the Pakistan Business Council in Dubai, welcomed the newly announced budget as a positive step toward economic stability and sustainable growth. He noted that the government's focus on development, tax simplification, and targeted support for exporters and SMEs is a promising move for the business community, both within Pakistan and internationally.

He highlighted the emphasis on digitalization, documentation, and compliance reforms as particularly encouraging, calling them essential for fostering a transparent, investor-friendly environment. The budget’s commitment to infrastructure development and a pro-business stance also opens up new opportunities for public-private partnerships.

Most importantly, the budget sets the stage for strengthening trade and investment ties between the UAE and Pakistan. The Pakistan Business Council Dubai sees significant potential for deeper bilateral collaboration and remains committed to supporting initiatives that drive inclusive and sustainable economic progress.

Concerns over development cuts

Syed Asif Zaman, Managing Partner, Ahmed Alagbari Chartered Accounts in Dubai, welcomed the government’s tone shift but warned of deeper implications.

“The increased focus on overseas Pakistanis is a step in the right direction, finally acknowledging their economic lifeline. But the cut in education spending by over 75% is alarming. How do we attract overseas Pakistanis to invest in or return to a system where the state is shrinking its footprint in basic services?” he said.

Voices of policymaking

He also urged for meaningful inclusion of overseas voices in policymaking. “Announcing councils is not enough. We need transparent, democratic, and accountable mechanisms where diaspora experts can shape national priorities, from taxation to tourism to trade,” he suggested.

“It is not just about being appreciated; it is about being empowered. The government must go beyond tokenism and build infrastructure, policy channels, and safety nets that make overseas Pakistanis feel like long-term partners in national development and not just sources of foreign exchange,” he noted.

Room for cautious optimism

Muhammed Nafees, a Dubai-based chartered accountant and Former Chairman of the Pakistan Chartered Accountants Forum UAE, acknowledged the symbolic progress but expressed skepticism about the overall economic direction of the budget.

“Yes, this is the first time in years we have seen tangible legal and educational reforms aimed directly at overseas Pakistanis. But gestures and awards alone will not restore investor confidence. There needs to be a coherent investment framework, particularly in real estate, taxation, and remittance channels.” Nafees told Gulf News.

Some questions

He criticised the absence of structural incentives. “Where are the tax breaks for diaspora investors? Where is the one-window facilitation system for overseas businesses? Without serious, well-structured reforms, we are missing a huge opportunity to tap into this $30+ billion annual inflow beyond just remittances,” he noted.

Nafees added: “With 47% of the budget going to debt servicing and only 7% allocated for development, it is clear the government is plugging holes, not building foundations. The overseas community is watching closely, and goodwill won’t last without real returns.”

Legal protection and dispute resolution: The establishment of dedicated courts to fast-track legal cases involving overseas Pakistanis, with an online system for submitting complaints and evidence, is aimed at reducing harassment and property disputes — long-standing grievances within the community.

Educational support: Reserved quotas in universities and medical colleges, along with skill-based scholarships, will be provided for children of overseas Pakistanis to ensure easier access to quality education.

Civil recognition: Starting this year, the top 15 remitters through formal banking channels will receive civil awards on August 14, as a gesture of national gratitude.

Streamlined travel: A revamped Green Channel will facilitate smoother immigration and customs processing at major airports.

Economic engagement: The government announced plans for diaspora investment schemes, consultative councils, and public-private partnerships to enable more direct involvement of overseas Pakistanis in economic and policy matters.