Finance Ministry terms Salaries Raise impossible in next federal budget: Pay raise in upcoming budget unlikely: Fauzia Wahab
Government cannot raise salaries when it is not allowed to increase its income through taxation
ISLAMABAD (May 6, 2011): Due to the non-availability of fiscal space, the government is unlikely to offer pay raise to government employees in the upcoming budget, said National Assembly’s Standing Committee on Finance Chairperson Fauzia Wahab.
Talking to reporters after attending a meeting on budgetary preparations at the Ministry of Finance, Fauzia questioned how could the government raise salaries when no one was allowing it to increase its income through taxation. At the meeting, briefings on the next year’s budget were given by the Finance Ministry and Federal Board of Revenue (FBR) chairman on the taxation measures that will be adopted by the government in the upcoming budget.
Fauzia said that there would have been a possibility to raise salaries if the reformed general sales tax (RGST) had been levied. She said that to achieve the target, it was important for the tax authorities to plug the leakages identified in the transit trade, improve efficiency and compliance and bring over 750,000 tax evaders in the tax net. Fauzia was of the view that the government must consider the Muttahida Quami Movement’s proposal of using the Pakistan Railways instead of the National Logistics Cell for the Afghan Transit Trade. She said that efforts were afoot to present a people-friendly budget in the difficult economic situation.
MQM’s Abdul Rashid Gondal said his party would support any move designed to bring those evaders and exempt sectors into the tax net. He said the government was looking serious this time and was consulting political forces in parliament on the budget. Another member of the NA committee told media that the impression he got during the meeting with the economic managers was that the government was unlikely to increase salaries of the public sector employees. He said the government did not have the fiscal space, while the provinces, particularly Punjab, had lodged a strong protest over the 50 percent raise in salaries the last year.
Officials of the Punjab Finance Department had reportedly taken up the matter with the federal government on number of occasions. They had stated that the federal government’s abrupt decision to raise salaries by 50 percent had cost over Rs 53 billion to the province. The decision of the federal government had irked other provinces as well.