How much salary raise government employees can expect in Budget 2024?
The Pakistan government is set to present its federal budget for the fiscal year 2024-25 on June 7.
The budget, estimated at Rs 16,700 billion, will address the country’s precarious economic conditions and align with the 24th “longer and larger” bailout program of the International Monetary Fund (IMF).
Key Financial Allocations
Interest and Loan Payments:
The budget allocates Rs 9,700 billion for expenditures on interest and loans, reflecting the significant financial burden of debt servicing on the national economy.
Subsidies:
An estimated Rs 1,500 billion has been earmarked for subsidies, aiming to provide financial relief in various sectors.
Revenue Projections
Tax Revenue:
The government projects tax revenues to exceed Rs 11,000 billion. Key components include:
- Direct Taxes: Expected to contribute Rs 5,300 billion.
- Federal Excise Duty: Anticipated to generate Rs 680 billion.
- Sales Tax: Likely to yield over Rs 3,850 billion.
- Customs Duty: Estimated to bring in Rs 1,100 billion.
Non-Tax Revenue:
Non-tax revenues are projected at Rs 2,100 billion, with a substantial portion expected from the petroleum levy, which alone is estimated to generate Rs 1,100 billion.
Budget Deficit:
The federal budget deficit is forecasted to be around Rs 9,300 billion, underscoring the ongoing fiscal challenges.
Measures to Control Inflation:
The government is implementing measures to curb inflation, with a target to reduce it to 5-7% by September 2025.
This is part of broader efforts to stabilize the economy and ensure sustainable growth.
Salary Increases and Fiscal Adjustments
A proposed 10-12% increase in salaries is under consideration, with the final decision pending a review of recommendations from the Ministry of Finance.
Tax Exemptions and New Taxes:
In line with IMF demands, the government is likely to end certain tax exemptions in the FY 2024-25 budget.
Additionally, the imposition of a sales tax on tractors and pesticides is being considered, which could lead to price hikes for these essential agricultural products.
The upcoming budget reflects the government’s commitment to balancing fiscal responsibility with the need to support economic stability and growth.
