Finance czar links pay, pensions to inflation in post-budget presser

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ISLAMABAD: Finance Minister Mohammad Aurangzeb addressed the post -budget press conference on Wednesday, which outline the government’s financial point of view and priorities for the financial year 2025-26 (FY66).

Talking one day of the federal budget of Rs 17.57 trillion, the finances emphasized the need to tie public and private sector salaries to inflation. “Whether it is public or the private sector, it should be linked to some benchmarks,” he said, adding that the salaries and pensions of many countries increase inflation.

A day after the federal budget of 17.57 trillion, the meeting began in the meeting, when journalists initially protested the absence of traditional technical briefing by the Federal Board of Revenue (FBR).

In the budget, the target of GDP growth has been fixed at 4.2 % while the overall federal spending has been reduced by 7 %. The government has proposed relief measures for the salaried class, which includes tax cuts and an increase in the threshold of exemptions.

The budget offers a financial deficit of 3.9 % of GDP and it is assumed that inflation will decrease by 7.5 % during the FY66. Defense spending has increased by 20.2 % to Rs 2,550 billion, while FBR has been assigned to collect Rs 14,131 billion in tax-which has increased by 18 % from last year-the proportion of GDP has been increased by 10.1 % last year.

It also proposes a new tax slab for the salaried class – which has bear the tax burden – the minimum rate for taxpayers has dropped from 15 % to 4 %, up from Rs 2.2 million annually.

The tax rate for those who make Rs 600,000 annually and Rs 1.2 million will decrease from 5 % to 2.5 %.

Also, it suggests stringent measures against non -filers to increase Pakistan’s tax net, which, if approved, will be closed with non -filers from the country’s financial system.

‘Tariff Corrections Key to Economic Growth’

Giving a briefing to the media today, Finance Czar explained the tariff reforms, saying that the tariff was zero on 4,000 tariff lines out of a total of 7,000.

Stressing on the importance of tariff reforms proposed in the budget, he said, “Tariff reforms have not been made for the last 30 years,” he said, expressing regret that he was not only essential for economic development but will also play an important role in the increase in exports.

Aurangzeb said the center would work with the provinces for the development of agriculture and livestock.

He added that there should be a policy on agriculture and livestock.

The finances announced that loans would be provided to small farmers on easy terms, and it has been assured that the government is trying to offer maximum relief.

He made it clear that no additional tax has been imposed on the agricultural sector in the new budget. However, he added, “We can only provide relief according to our financial ability”.

The minister noted that the current inflation rate is 7.5 %. He called for the government’s responsibility to reduce federal spending, saying, “This time, we have a limited federal spending to 2 %”.

Aurangzeb acknowledged, “Our budget begins with a deficit,” while recognizing the historic trend of growing national debt. “In the past, our debt continued to increase”.

He justified some of the increase in costs, saying that they were essential. “We have to move forward according to our sources,” he said.

Commenting on the government’s overall financial point of view, he said, “Whatever the government is providing, it is doing this by borrowing.”

He identified the government’s dependence on further loans and borrowed money and defended the increase in salary for the Speaker and Senate Chairman of the National Assembly.

Aurangzeb added, “Look when the salaries of ministers, ministers, and parliamentarians were last increased. The last increase in the salaries of cabinet ministers was in 2016.”

Explaining that non -profit organizations were not subjected to tax measures globally, Lingal said: “In the future, no organization will be exempt from scrutiny.”

“The institutions have to prove that they are not working on a commercial basis,” he added.

The head of the tax authority remarked, “When non -profit organizations are not established for profit, duty is not produced. We have set up another two tables for non -profit organizations. The FBR tax government is based on its own diagnosis.”