ISLAMABAD – The government is considering various proposals to increases government employees’ salaries ranging from 10% to 15% in the upcoming budget 2024-25.
The govt is boosting both Federal Board of Revenue (FBR) tax revenues and non-tax revenues in order to get a $6 billion agreement with the International Monetary Fund (IMF) under the Extended Fund Facility (EFF).
In the forthcoming budget, the government is considering setting the FBR tax revenue target at over Rs12.5 trillion. Regarding salaries, the Ministry of Finance prefers a 10% increase, but there might be pressure to adjust this upward by 2.5% or even 5%, leading to a potential salary hike of 12.5% to 15%.
Another proposal under consideration is to increase the car monetization allowance for higher-grade officers (grades 20, 21, and 22) by 20% to 25%. Currently, grade 20 officers receive Rs67,000 per month, grade 21 officers receive Rs77,000 per month, and grade 22 officers receive Rs87,000 per month.
Adjustments are being considered due to inflation, as these allowances have not been increased since the policy’s inception in 2012.
The government plans to introduce pension reforms in the 2024-25 budget. One proposal includes taxing pensioners who receive more than Rs100,000 per month, potentially introducing different tax brackets for higher pension earners.
According to the proposals, federal employees would receive a gross pension based on 70% of their average pensionable earnings over the last 36 months of service before retirement. Employees could opt for early retirement after 25 years of service but would face a 3% annual reduction in their gross pension until reaching the standard retirement age.
