The Senate Finance Committee has proposed 20 percent increase in salaries of federal government employees.
This decision was taken in the committee meeting chaired by Talha Mahmood on Monday.
The committee members favoured 20 percent increase in salaries saying that inflation has risen sharply and a 10 percent increase is insufficient.
They said provinces have announced more increase in salaries than the federation.
At the start of the meeting, Senator Saleem Mandviwala announced the death of former Senator Usman Kakar and Fateha was offered for the departed soul.
Kakar, a former senator of the Pashtunkhwa Milli Awami Party, died in a Karachi hospital. He was taken to Karachi from Quetta after he suffered a brain haemorrhage last week.
The committee considered the proposal of tax exemption on medical and special allowances allowed to abolish the allowances of those employees who draw Rs1 million and above per month salary.
The committee also discussed reduction in sales tax on accounting services and proposed five percent sales tax instead of 16 percent.
Sindh, Punjab, Balochistan and KP has reduced sales tax on accounting services.
The committee rejected the proposal of 17 percent sales tax on crude oil.
The Standing Committee recommended withdrawal of tax hike on cosmetics.
Sadia Abbasi said taxes and duties on cosmetic products should be reduced.
Raising taxes on cosmetics will affect business of small group who import goods from Hong Kong and Korea, she added.
Saleem Mandviwala said increase in the tax on cosmetics will likely push up prices.
The government has imposed a 17 percent tax on local and imported cosmetics and the committee proposed a reduction in the tax.