Pakistan’s budget proposals under review include a 10% salary increase for government employees, a pension increase of up to 80%, and tax relief for salaried people earning between Rs1.2m and Rs2.2m. sources said.
The Ministry of Finance is preparing proposals for the 2026-27 federal budget, according to the source. The measures will be presented to Prime Minister Shehbaz Sharif and the federal cabinet for review.
Officials are also considering tax relief for salaried individuals earning between Rs1.2 million and Rs2.2 million annually. The proposal is aimed at middle-income taxpayers.
The budget proposals include a revision in the conveyance allowance due to rising petroleum costs. Employees in Grades 1 to 19 may get double the allowance, while officers in Grades 20 to 22 may receive a 50% to 75% increase.
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The ministry is also reviewing the merger of one ad-hoc relief allowance from four allowances granted between 2022 and 2025.
Sources said a disparity allowance for employees in Grades 1 to 16 is also part of the proposed budget measures.
Discussions are also underway on bringing armed forces personnel into a contributory pension scheme from the next fiscal year.
A final decision is expected in a federal cabinet meeting before the budget session scheduled for June 5.
