The federal cabinet on Wednesday approved a 15 per cent increase in pensions under the Employees’ Old-Age Benefits Institution (EOBI) and granted a five-year tax exemption on life-saving drugs, including those used in the treatment of cancer and cardiac diseases.

The decisions were taken in a meeting chaired by Prime Minister Shehbaz Sharif, according to an official statement issued after the session.

The EOBI pension increase will come into effect from January 1, 2025, with the institution itself bearing the financial responsibility for the adjustment. Earlier this year, EOBI raised the minimum monthly pension from Rs10,000 to Rs11,500, following a 40 per cent surge in institutional income, which rose to Rs116 billion.

Pensions for informal sector workers

The cabinet also approved the formation of a committee to undertake institutional reforms in EOBI, with a focus on extending benefits to informal sector workers, including domestic and agricultural labourers.

A high-level committee will also be constituted to propose reforms aimed at enhancing EOBI’s operational capacity and improving services for pensioners.

Read More: UK Lifts Air Safety Ban on Pakistani Airlines

Tax relief on essential medicines

In a separate move to ease healthcare expenses, the cabinet approved a five-year tax exemption on critical life-saving medications, particularly those related to cancer and heart diseases.

According to the statement, the decision is expected to provide relief to patients while supporting local pharmaceutical research and production aligned with global standards.

These medications will be restricted to hospital use only and will not be available for open retail sale. Furthermore, licensing authority approval will be required for their import.