The federal government has proposed a 7% increase in the salaries of public sector employees as part of the fiscal year 2026–27 budget, alongside a matching hike in pensions for retired government workers and a 10% rise in the minimum wage.
The proposals were revealed by Finance Minister Muhammad Aurangzeb during his budget speech in the National Assembly on Friday. The session, chaired by Speaker Ayaz Sadiq, was marked by noisy protests from opposition lawmakers, who raised slogans and displayed placards, while treasury benches welcomed Prime Minister Shehbaz Sharif with desk-thumping applause.
Finance Minister Touts Pakistan’s Global Standing
Addressing the assembly, Aurangzeb struck an optimistic tone about the country’s international reputation. “This budget is being presented at a time when Pakistan has achieved the status in the eyes of its people and the world as a country whose voice is listened to, and whose friendship is desired,” he said.
The wage and pension proposals are central to the government’s strategy to support public sector workers amid ongoing economic pressures. The 10% minimum wage increase is expected to provide relief to the lowest-paid segments of the workforce.
Tax Relief for Salaried Individuals
In a significant move, the government also proposed income tax relief across four revised slabs for salaried individuals. The Finance Bill recommends the abolition of the surcharge on the salaried class and introduces intermediate tax slabs to reduce the burden on taxpayers.
The proposed tax structure for salaried earners is as follows:
- Annual income between Rs2.2 million and Rs3.2 million: Rs116,000 plus 20% of the amount exceeding Rs2.2 million.
- Annual income between Rs4.1 million and Rs5.6 million: Rs541,000 plus 29% of the amount exceeding Rs4.1 million.
- Annual income between Rs5.6 million and Rs7 million: Rs976,000 plus 32% of the amount exceeding Rs5.6 million.
<>Annual income between Rs3.2 million and Rs4.1 million: Rs316,000 plus 25% of the amount exceeding Rs3.2 million.
The budget presentation comes as Pakistan navigates a complex economic landscape, with the government targeting a 4% growth rate amid regional tensions. The full implications of the proposed fiscal measures will be debated in parliament in the coming days.
