Pakistan, IMF agree to raise govt employees salaries in budget

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have finally reached consensus over increase in salaries of government employees in the upcoming 2020-21 fiscal year budget.

The third round of budget talks between Pakistan and the global financial institution was held here on Tuesday in which IMF agreed to the increase in salaries of government employees after days of negotiations.

Pakistan has also managed to persuade the IMF for an increase in pension of retired employees, while the global lender has also agreed to not increasing electricity bills and gas tariff till October. However, the government has assured the IMF that it will increase non-tax revenue.

Earlier, the IMF had urged Pakistan to freeze salaries of government employees and follow fiscal consolidation by showing a nominal deficit in the new budget.

The government is set to unveil the budget on June 12. The federal government has decided to present a tax-free budget for the fiscal year 2020-21. Finance Adviser Dr Abdul Hafeez Shaikh has said that the government will not introduce any new tax in the forthcoming budget.

The government will take strict measures to curb tax evasion. Federal Board of Revenue (FBR) is expected to receive directions to stop tax evasion in the country.