Islamabad:
In a very necessary relief for government employees for taxes and affected by inflation, the government increased its salaries by 10% along with a 4% cut in the income tax rate in several slabs in the federal budget presented on Tuesday.
The Government has taken a significant step to provide substantial relief to the lowest and middle income sectors, proposing a reduction of up to four percent in the Income Tax in several slabs. In addition, the Government also proposed a 1% decrease in the surcharge by winning more than 10 million annual rupees.
Presenting the Federal Budget for Fiscal Year 2025-26, the Minister of Finance, Muhammad Aurengzeb, declared that the prime minister had constantly struggled to reduce taxes to salaried persons. “Taking into account this objective, we have proposed a decrease in income tax in all slabs,” he said.
“This measure will not only facilitate the existing fiscal structure, but will also achieve a crucial balance between inflationary pressures and payment to take individuals to relieve fiscal burden,” the minister announced, while pronouncing the budgetary discourse in the National Assembly.
According to the budgetary proposal, people who earn between RS600,000 and RS1.2 million per year will receive significant fiscal relief, since the government reduces the tax rate from 5% to 1%. For those who earn to RS100,000 per month, the amount of the total tax decreases from RS30,000 to RS6,000.
Similarly, people in the next slab who earn up to RS2.2 million per year will see a 4% decrease from 15 to 11% in the tax rate on the income of their salaries. People who win up to RS3.2 million will benefit from a 2%cut, 25 to 23%, in the next fiscal year.
Meanwhile, in a movement to mitigate the phenomenon of cerebral drainage, which sees the professional human resources that face the highest tax burden in the region, the government has proposed a 1% decrease in the surcharge applied to people who earn more than RS10 million per year.
The wage class paid an amazing income tax of RS331 billion in the eight months of the current fiscal period, July -February, which is 1,350% more than the taxes paid by retailers. The amount was also RS120 billion, or 56% higher than RS211 billion raised during the same period of the last fiscal year.
Simultaneously, the Minister of Finance also proposed a 10% increase in the salaries of federal government employees and a 7% improvement in the pensions of federal employees. However, he said that high -income pensioners would be brought under the fiscal network.
The Minister of Finance, Aurengzeb, said that despite financial limitations, the Government had decided to give a 10% increase in the salaries of government employees of Grade 1-22, in order to increase their purchasing power.
In addition, the special transport assignment for disabled employees from RS4,000 to RS6,000 was increased. To reduce disparities among employees of several departments, he announced the provision of 30% of disparity reduction for eligible employees.
This relief, said the minister, would not only simplify the fiscal structure, but also guarantee a balance between inflation and salary to take home. “This movement reflects the government’s commitment to make more fair taxes and reduce the burden of salaried people,” said finance minister.
Similarly, the minister announced a 7% increase in retired employee pensions. He said that a 5% tax on the income of pensioners of up to 70 years, whose annual pension exceeded RS10 million. He said that no low and medium -sized pensioners will be imposed.
He said that the pension plan had been modified through executive orders in recent decades, which carried the national treasure. To rectify the situation, the government introduced reforms, such as discouraging early retirement and linking the increase in pensions with the consumer price index (CPI).
The Minister of Finance also said that the duration of the family pension has been restricted to 10 years after the death of the spouse, and that multiple pensions had been abolished. Upon using again after retirement, an individual will have to choose between pension and salary.
