Govt Takes U-Turn On Raising Retirement Age of Its Employees

Govt Takes U-Turn On Raising Retirement Age of Its Employees

The federal government has scrapped a proposal to increase the retirement age of public sector employees, military personnel, and civil and judiciary workers in Finance Bill 2024.

The possibility of increasing the retirement age from 60 to 62/63 for civil employees has been significantly reduced, however, pension reform proposals including changes to pension payment provisions remain under consideration, reported a national daily.

Elsewhere, the government is still planning to abolish a number of ministries and to convince provinces to share the burden of social protection initiatives like the Benazir Income Support Programme (BISP). A high-powered committee led by Finance Minister Muhammad Aurangzeb is working on recommendations to control government expenditures, with findings expected to be announced around August 14.

The finance minister has already announced a reduction in the development budget by Rs. 250 billion, maintaining the overall Public Sector Development Program (PSDP) at Rs. 1,500 billion.

The National Economic Council (NEC) approved a PSDP of Rs. 1,500 billion, with Rs. 1,400 billion from budgetary resources and Rs. 100 billion through Public-Private Partnership (PPP). The budgetary resources portion was reduced to Rs. 1,150 billion, while the PPP portion increased to Rs. 350 billion.

The government is seeking approval from the International Monetary Fund (IMF) to introduce changes to the Finance Bill 2024. These changes include restoring a fixed tax regime for exporters and providing relief on hybrid vehicles, GST on stationary, charitable organizations, and other items. There is also a possibility of withdrawing the tax increase for professors and researchers.

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