ISLAMABAD: The federal government Monday notified an increase in net pension by 7 per cent for retired civilian and armed forces personnel, effective from July 1, 2025.
The government also decided continuation of austerity measures in the current fiscal year by banning of seven measures such as purchase of all types of vehicles except operational vehicles such as ambulances and other medically equipped vehicles, fire fighting vehicles, buses and vans for educational institutions, solid waste vehicles and motorbikes; procurement of machinery/ equipment except those required for hospitals/ laboratories/ agriculture/ mining/ schools; creation of new posts including contingent paid/ temporary posts; continuation of contingent paid/ temporary posts beyond one year; treatment abroad at government expense; and all non-obligatory visits abroad where the government funding was involved. All posts lying vacant from the last few years will be abolished.
According to a notification issued by the Finance Ministry on hike in pension stating that the President has been pleased to sanction an increase at the rate of 7pc of net pension with effect from July 1, 2025 to all civil pensioners of the federal government including civilians paid from defence estimates as well as retired armed forces personnel and civil armed forces personnel.
The increase will also be admissible on family pension granted under the pension-cum-gratuity scheme, 1954, and Liberalised Pension Rules, 1977, as amended from time to time, on pension sanctioned under the Federal Civil Services (Extraordinary Pension) Rules as well as on the Compassionate Allowance under CSR-353.
For the purpose of admissibility of increase, the term net pension means “net pension being drawn as on June 30, 2025 minus medical allowance”. This pension will be termed baseline pension for computation of the instant and future increases. The said increase will be maintained as a separate amount in terms of Finance Division O.M. No.9 (3) R-6/2024-403 dated January 1, 2025.
If the gross pension sanctioned by the federal government is shared with any government in accordance with the rules laid down in Part-IV of Appendix-III to the Accounts Code, Volume-I, the amount of the increase in pension will be apportioned between the Federal Government and the other government concerned on proportionate basis.
The increase in pension sanctioned will not be admissible on special additional pension allowed in lieu of pre-retirement orderly allowance and the monetised value of a driver or an orderly. The cabinet further approved that:- (1) The following austerity measures shall also be applicable mutatis mutandis during FY 2025-26 in the case of all Federal Government Attached Departments, State-Owned Enterprises and Statutory Bodies etc. including Regulatory Authorities: Approved by the Cabinet on February 22, 2023 and notified by the Cabinet Division vide O.M. No. 9-148/2002-Min-II dated February 28, 2023; and approved by the Cabinet on August 27, 2024 and notified by the Finance Division vide letter No. 7(1)Exp-IV/2024 dated September 4, 2024.
In the case of State Owned Enterprises, these austerity measures shall be considered a direction of Federal Government under section 35 of the State-Owned Enterprises (Governance & Operations) Act, 2023 and under the relevant sections of their respective organic laws in the case of statutory bodies.
Meanwhile, Prime Minister Shehbaz Sharif said on Monday that reforms in the Federal Board of Revenue (FBR) were among the government’s top priorities, and the new technology-based modern system would bring ease in doing business and provide convenience to taxpayers.
Chairing a meeting here, he said: “By automating the tax system, we are making it more transparent and effective.” Due to reduced human intervention, he added, the system would be more efficient, saving both time and money. The PM ordered to make the new system integrated and sustainable. He appreciated the officers and staff who worked on development of the new risk management system.
The FBR, under the direction of Prime Minister Shehbaz Sharif, for the first time in Pakistan’s history, introduced the Artificial Intelligence (AI)-based Custom Clearance and Risk Management System (RMS).
The meeting was informed that under the new system, estimation of cost and nature of goods during import and export would be conducted by Artificial Intelligence and BOTs. [A software programme that can execute commands, reply to messages, or perform routine tasks].
The new risk management system, based on modern technology, will continuously improve through automation using machine learning, along with the movement of goods, the meeting was told. “During the initial testing of the new system, over 92pc improved performance was observed.”
The briefing showed that in initial testing, not only was 83pc more goods declarations (GD) determined for tax collection, but goods clearance through the green channel also increased two-and-a-half times.
It was informed in the meeting that the new risk management system would bring transparency to the system, minimise human intervention, and provide ease to businessmen. With the launch of the new system, immediate and effective estimation of goods and their cost would be possible, resulting in time savings.
The meeting was further informed that the implementation of the new system would reduce pressure on customs officials, enhance transparency and efficiency, and facilitate businessmen.
The meeting was briefed on video analytics-based measures to increase tax collection in the manufacturing sector. Minister for Finance Muhammad Aurangzeb, Minister for Information Attaullah Tarar, Chairman FBR and other senior government officials attended the meeting.
Meanwhile, PM Office Media Wing said in a press release on Monday that PM Shehbaz Sharif commended the FBR and Intelligence Bureau (IB) for their efforts to increase tax collection and stressed that all relevant authorities should work together to increase national tax revenue. He observed that stability in Pakistan’s economy was made possible due to joint efforts of the team, stressing that everyone should collaborate for the country’s economic progress and the prosperity of the people.
The prime minister was presented with a report by the FBR and IB on operations against tax evasion and hoarding. According to the report, the joint efforts by the IB and FBR had resulted in the recovery of Rs.178 billion. These measures led to a Rs69 billion increase in tax revenue through company mergers and telecom sector dues, it was added.
The IB conducted 515 raids in the sectors of sugar, animal feed, beverages, edible oil, tobacco and cement. As a result of these operations, Rs10.5 billion in additional taxes were recovered by thwarting attempts at tax evasion, the report added.
To overcome hoarding and artificial price hike, the IB carried out over 13,000 operations in the sugar, fertiliser, and wheat sectors, seizing illegally hoarded goods worth more than Rs99 billion since April 2022, the report further said.
Separately, PM Shehbaz Sharif invited the Etisalat Group to further invest in various sectors of Pakistan’s economy and assured that the government would provide all necessary facilities in this regard. He met a five-member delegation of the Emirati telecommunications company Etisalat Group, led by its CEO Hatem Dowidar that called on him, PM Office Media Wing said in a press release.
Deputy PM and Foreign Minister Ishaq Dar, Minister for Finance Muhammad Aurangzeb, Minister for IT Shaza Fatima Khawaja and senior officials from the relevant institutions also attended the meeting.
CEO Etisalat Hatem Dowidar praised the prime minister for the current investment-friendly policies of the government which had created better business opportunities for the international companies.
He said that the Etisalat Group had been successfully investing in Pakistan for the past 19 years and was eager to expand its business and investment, adding that over 10,000 Pakistanis were rendering valuable services in the company.
