Budget 2024-25: Govt Servants to get 10-15pc salary increase
Budget 2024-25: Govt Servants to get 10-15pc salary increase.
Budget 2024-25: Potential Salary Hike and Pension Reforms for Pakistan’s Government Employees
Pakistan’s upcoming budget for 2024-25 is sparking discussions surrounding potential salary increases and pension reforms for government employees.
Read More: Govt Unveils Budget 2024-25 Schedule
This news is particularly relevant for public sector workers and those interested in the country’s economic landscape.
Salary Increase Proposals:
The government is considering proposals for a 10% to 15% salary hike for government employees. This move aims to address rising inflation and improve employee living standards.
The Ministry of Finance favors a 10% increase, but negotiations might push this upwards due to inflationary pressures.
Factors Influencing Salary Increase:
- Securing IMF Loan: The government’s focus on boosting tax revenue through the FBR is likely tied to securing a $6 billion Extended Fund Facility (EFF) agreement with the International Monetary Fund (IMF). This agreement often comes with fiscal consolidation measures.
- Inflation Adjustment: The proposals acknowledge the impact of inflation on current salaries, which haven’t seen adjustments since 2012.
Car Monetization Allowance Increase:
Another proposal includes a 20% to 25% increase in car monetization allowance for high-ranking officers (grades 20, 21, and 22).
This allowance aims to offset the rising costs of car maintenance and operation.
Pension Reforms on the Horizon:
The budget also proposes pension reforms for the 2024-25 fiscal year. Key ideas include:
- Taxing High Pensions: Pensioners receiving over Rs. 100,000 per month might face taxation. This could incentivize a tiered tax structure for higher pension brackets.
- Early Retirement: The option for early retirement after 25 years of service could be introduced. However, this would come with a 3% annual reduction in gross pension until reaching the standard retirement age. This discourages early retirement and protects long-term financial security.
- Calculating Gross Pension: The proposed calculation for gross pension involves 70% of an employee’s average pensionable earnings over the last 3 years before retirement.
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