In an announcement on Wednesday, Ashfaq Tola, Chairman of the Reforms & Resource Mobilisation Commission, revealed that government employees can expect a substantial pay hike of approximately 20% in the forthcoming budget. Mr. Tola emphasized the need to boost the salaries of lower-grade employees, noting that their current remuneration is disproportionately low.
During an event to launch the report titled “Unveiling Tax Evasion: A Closer Look at Five Sectors in Pakistan,” prepared by Paris-based research organization Ipsos, Mr. Tola discussed the significant issue of tax evasion in the country. According to the report, tax evasion in five sectors alone results in an annual loss of Rs956 billion. The real estate sector contributes an estimated Rs500 billion to this figure, followed by Rs240 billion from the tobacco sector, Rs106 billion from tires and auto lubricants, Rs65 billion from the pharma sector, and an additional Rs45 billion from the illegal tea trade.
Highlighting the detrimental effects of tax evasion, Mr. Tola described it as a menace that has given rise to a parallel economy. He identified the lack of coordination among different government departments as a contributing factor, suggesting that automation and financial inclusion are crucial for economic growth and combating tax evasion. Furthermore, he criticized the implementation of the 18th Amendment, stating that although 58.5% of national resources are transferred to the provinces, they are not being held accountable for their performance.
To address the issue of smuggling, Mr. Tola proposed the installation of scanners to inspect containers returning after delivering transit trade goods in Kabul. Such measures could help curb illicit activities and ensure compliance with trade regulations.
The announcement of a potential 20% salary increase for government employees has been met with anticipation and positivity. It is hoped that this raise will address the issue of low wages, providing much-needed financial relief to lower-grade employees and ultimately improving their quality of life.
As the budget is finalized, it is crucial for the government to prioritize fair compensation across all grades of government employment. Additionally, tackling tax evasion should remain a top priority, with increased coordination among government departments and the implementation of automated systems to ensure greater transparency and accountability.