On June 5, 2025, Pakistan People’s Party (PPP) leader Chaudhry Manzoor, head of the People’s Labour Bureau, met President Asif Ali Zardari to advocate for a 50% salary increase and 100% pension hike for government employees in the upcoming Rs17.68 trillion 2025-26 federal budget, set for unveiling on June 10. Concurrently, the International Monetary Fund (IMF) agreed to provide income tax relief, enhancing worker welfare.
Manzoor urged for a 50% minimum salary increase, the integration of ad hoc relief into basic pay, and the abolition of pension reforms. He also called for a minimum wage of Rs 50,000 for labourers and a 100% increase in EOBI pensions. Zardari emphasised the importance of prioritising the working class, stating, “Societal progress depends on their relief.” Chaudhry Manzoor’s push for salary hikes aims to address the impact of inflation.
IMF’s Tax Relief Measures
The IMF’s approval entails amending Section 129 of the Income Tax Ordinance to reduce income tax rates across all salary brackets. It raises the tax-free income threshold from Rs600,000 to Rs1 million annually and exempts monthly salaries up to Rs83,000, increased from the current Rs50,000 limit. This tax relief measure from the IMF aims to support salaried workers in Pakistan.
Read: Pakistan Secures IMF Income Tax Relief for Salaried Class
The Pakistan budget for 2025-26 has been reduced by Rs900 billion from the current total of Rs18.7 trillion. This budget includes austerity measures and relief for the construction sector.
According to ARY News, it is expected to be finalised after Eid-ul-Adha and reflects input from stakeholders, including the PPP. Additionally, the focus on employee welfare aligns with Pakistan’s growth target of 4.2%.
