Federal government employees are expected to receive a 10 percent salary increase in the upcoming Budget 2026-27, according to sources cited by ProPakistani. The proposed raise is part of broader relief measures being considered by the government to address rising inflation and support public sector workers.
The federal budget for the new fiscal year is likely to be set at around Rs18 trillion, with authorities also weighing new tax measures worth approximately Rs220 billion. Officials familiar with budget preparations say discussions are ongoing to balance revenue generation with public relief initiatives.
Alongside the expected salary increase, the government is also considering income tax relief for salaried individuals. Proposed adjustments may benefit employees earning between Rs1.2 million and Rs2.4 million annually, aiming to ease the financial pressure on middle-income earners.
Sources further indicated that policymakers are evaluating a possible reduction in the super tax, while keeping the corporate income tax rate unchanged. These measures are being discussed as part of efforts to maintain business stability while gradually expanding the tax base.
On the expenditure side, the non-development budget for federal ministries and departments is projected at around Rs1,070 billion. In addition, pension-related allocations are expected to exceed Rs1,100 billion, reflecting the growing burden of retirement payments on public finances.
The upcoming budget is expected to focus on balancing fiscal discipline with targeted relief measures. While final decisions have not yet been announced, key proposals are likely to be revealed during the official budget presentation.
Also read: Federal Cabinet Approves Significant Salary Hike for Ministers
