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Aftab Maken
ISLAMABAD: The Senate Standing Committee on Finance has recommended a 50% increase in government employees’ salaries, a 20% rise in pensions for retired public servants, and fixing the minimum monthly wage at Rs 50,000. The panel also proposed increasing the Employees’ Old-Age Benefits Institution (EOBI) pension to Rs 23,000 to provide relief to pensioners grappling with inflation.
The Senate Finance Committee, chaired by Senator Saleem Mandviwalla, held a crucial meeting in Islamabad, during which these people-centric budget recommendations were finalized.
Rejecting the earlier proposal of a 7% increase in pensions, the committee recommended enhancing the raise to 20%. Similarly, instead of a modest 10% increase, the panel suggested a substantial 50% hike in salaries for government employees across the board. These proposals are being seen as major relief measures in the face of record inflation and rising cost of living.
In a move aligned with growing public demand for wage reform, the committee proposed raising the minimum monthly wage from Rs. 37,000 to Rs. 50,000. For EOBI pensioners, the committee suggested doubling the pension from Rs. 11,500 to Rs. 23,000 — a long-awaited demand from senior citizens.
Among other notable budget 2025-26 suggestions, the committee recommended eliminating sales tax on solar panels to encourage renewable energy adoption and proposed reducing the sales tax on vehicles up to 850cc from 18% to 10%, which could benefit middle-class car buyers.
The committee also suggested major income tax relief for salaried individuals by proposing exemption for annual incomes up to Rs 1.2 million. At the same time, it recommended imposing a 10% income tax on agriculture income exceeding Rs. 5 million annually, a step toward tax equity.
The committee further advised against imposing debt service surcharge on electricity bills for households consuming up to 200 units per month. It proposed zero-rating stationery items and reducing sales tax on homeopathic medicines from 18% to just 1% to support education and alternative healthcare sectors.
In a pro-labor move, the Senate body urged the government to regularize all daily wage employees. Additionally, it recommended removing the 3% additional tax on grand chicken, applying sales tax to dyes and chemicals under the Export Facilitation Scheme (EFS), reducing excise duty on juices and beverages by 15%, and abolishing the 2% income and sales tax on online shopping.
These recommendations, if accepted in the final federal budget 2025-26, could bring meaningful relief to salaried classes, pensioners, and the business community alike.
