Government announces 7% raise in pay, pensions, proposes tax relief for salaried class

ISLAMABAD, Jun 12 (APP): Finance Minister Muhammad Aurangzeb on Friday announced a 7% ad hoc increase in the salaries of federal government employees and a 7% rise in pensions for retired federal employees as part of the federal budget measures aimed at providing relief amid inflationary pressures.

Presenting the budget in Parliament, the finance minister said the government recognized the economic challenges faced by lower-income groups and had decided to increase government employees’ salaries by 7%. He added that pensions of retired federal government employees would also be raised by 7%.

The minister further announced a 10% increase in the minimum monthly wage to support workers and improve their purchasing power.

Highlighting relief measures for salaried individuals and taxpayers, Muhammad Aurangzeb said the government had decided to reduce income tax rates across four income slabs.

According to the proposal, the tax rate for individuals earning between Rs2.2 million and Rs3.2 million annually will be reduced from 23% to 20%. For those earning between Rs3.2 million and Rs4.1 million, the rate will decrease from 30% to 25%.

Similarly, taxpayers with annual incomes ranging from Rs4.1 million to Rs5.6 million will see the tax rate reduced from 35% to 29%, while those earning between Rs5.6 million and Rs7 million will benefit from a reduction from 35% to 32%.

The finance minister also announced the abolition of the surcharge on the salaried taxpayers, saying that the move would further reduce the tax burden and provide additional relief to taxpayers.