Woes of retired employees

This taxation is adding to woes of the retired employees at a time when there has been no increase in their pensions

KARACHI: The government introduced new taxes for the employees of Pakistan International Airlines (PIA) without any discrimination between regular and retired employees. This is sheer injustice as retired employees cannot afford to bear the burden of these taxes. As per the Finance Act of 2014, the government increased the Federal Excise Duty (FED) rate on services provided or rendered in respect of travel within Pakistan by air to Rs2,500 on long routes, Rs1,250 on short routes, and Rs500 on socio-economic routes, while also levying four per cent tax on all international travel. This is affecting the retired employees severely in today’s inflationary times because they are already burdened and this taxation further disturbs them as they are not able to fully enjoy the facility of travelling once allowed to them by the airline. This taxation is adding to the woes of the retired employees at a time when there has been no increase in their pensions for a long time. Almost every year there is a plausible increase in the pensions of federal and provincial government employees at the time of budgets, but this is not the case with the retired employees of PIA despite their pensions being very low compared with other government departments.

The national airline gives its employees 32 per cent of their total salary as pension, but the formula (which was adopted in 2003) it applies in the end, determines the pension by calculating their basic pays. This is not just. As per rules, all other government organisations give their retired employees 50 per cent of their salaries as pensions. This was also in practice at PIA till the end of 2003. The retired employees have been demanding for long that the airline should either give them 50 per cent pension on the basic pay or fix the pension to be given on their total salaries at 32 per cent without the said formula. Another option is that the government and the airline should either increase the pensions of retired employees in order to compensate for this taxation or spare them this burden. In the end, I would like to make an appeal to Finance Minster Ishaq Dar to look into this issue and try to bring about a solution to help the retired employees of the airline.

Bashir Ahmad

Ex-GM, PR, PIA

Published in The Express Tribune, May 6^th,  2015.

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