The federal government has decided to merge two previous ad hoc allowances into the basic salary, offering significant relief to government employees.
According to a private TV channel, the Ministry of Finance said the move is aimed at shielding employees from the impact of rising inflation and easing their financial burden.
The 15 per cent ad hoc relief allowance introduced in 2022 and the 10 per cent ad hoc allowance introduced in 2025 have now been made a permanent part of the basic salary.
The Ministry of Finance said this decision will significantly increase the basic salary of government employees, and its impact will also be reflected in future benefits, pensions, and other allowances.
Furthermore, the federal government has also approved a 50 per cent increase in the conveyance (travel) allowance of government employees. This decision has been taken in view of rising petroleum prices and increasing daily travel expenses, in order to provide financial relief to employees.
According to authorities, these measures will improve the standard of living of employees. Due to the increase in basic salary, other benefits such as house rent allowance will also automatically increase. The government has described this as an important relief for the salaried class in the current economic situation.
It is worth mentioning here that Finance Minister Muhammad Aurangzeb, in his budget speech, stated that a proposal is under consideration to introduce a fixed tax system for small shopkeepers.
He stated that under the proposed system, shopkeepers with annual sales of less than Rs 200 million would be eligible to participate.
They will pay a tax of 1% on their annual sales. Shopkeepers will be able to adjust their withholding tax against this fixed tax.
They will be required to deposit at least Rs 25,000 when submitting their returns. They will not be subject to routine audits, will not be responsible for withholding tax on purchases, and will be exempt from using a POS machine.
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