10% rise in salaries, pensions of govt employees

Overall relief for salaried class to be much higher than the ad-hoc relief, minister claims

ISLAMABAD: The government has announced an ad-hoc relief of 10 per cent in the salaries and pensions of civil and military employees in the federal budget 2018-19 which will be effective from July 2018.

The increase will be in addition to the major relief the salaried class will get due to drastic cuts in income tax rates that Prime Minister Shahid Khaqan Abbasi had announced earlier, said Minister for Finance Miftah Ismail during his budget speech.

Ismail said the salaried persons mostly are from the middle class and will be the major beneficiary of the relief measures, adding that all these decisions will have a financial impact of Rs69 billion.

Ismail said that under the income tax relief package for individuals, there will be no tax on incomes of up to Rs1.2 million annually; 5% on income exceeding Rs1.2 million up to Rs2.4 million; Rs60,000 plus 10% on income from Rs2.4 to Rs4.8 million and Rs180,000 plus 15% on income exceeding Rs4.8 million.



Together with the tax cut, the overall relief for the salaried class will be much higher than the 10% ad-hoc relief announced in the federal budget.

He said Rs5 billion have been allocated for senior officers performance allowance, details of which will be announced later, while Rs12 billion is earmarked for advances for the purchase and construction of houses, vehicles, etc for government officials.

“The house rent ceiling has also been increased by 50%, besides an increase of 50% in the house rent allowance,” he added. Ismail said in view of the difficulties of low-paid pensioners, the minimum pension has been increased to Rs10,000 from the present Rs6,000.



He also announced an increase in minimum pension to Rs15,000 for the pensioners over the age of 75, and a rise in family pension (transferred from deceased spouses) from Rs4,500 to Rs7,500. “The overtime allowance of staff drivers and dispatch riders has been increased from Rs40 to Rs80 per hour,” he added.