FM’s report: Pool vehicles to continue, PIT to be amended and changes made in pay revision report

The Finance Minister Lyonpo Namgay Dorji on Monday 17th November 2014 will be sharing the response and the actions of the government on various resolutions on financial matters passed by the National Assembly and National Council.

The minister in his report has said that the government carried out a detailed review of the recommendation of the second pay commission for immediate withdrawal of pool vehicles. It was found that the withdrawal would directly impact on service delivery at various levels, besides affecting the implementation of plans and policies of the government.

Therefore it was decided not to implement the withdrawal, however, use of pool vehicles would be strictly controlled and replacement permitted only when it is absolutely necessary. A pool vehicle policy is being worked out by the Ministry of Finance.

The National Council in its resolution had recommended increasing the taxable bracket from the existing Nu 100,000 to Nu 200,000. This would basically mean that people especially at the lower income level would have to pay less income tax and it would also mean savings for the middle income bracket.

The MoF has said that a proposal for the Amendment of the Income Tax Act 2001, incorporating the changes in taxable bracket will be submitted to the summer session of the Parliament in 2015. It said that the preparatory works are being done in this regard. Though it is not yet clear what will be the tax exemption bracket, this development shows that the government will be changing the tax brackets.

On House Rent Allowance the MoF said that the government directed the ministry to review HRA payment in rural areas. Accordingly, the MoF is reviewing the HRA for the civil servants working in the rural areas and a report on the same will be submitted to the government.

Based on the National Assembly resolution the MoF has increased the salary of the community based teachers by 40% at par with those of the consolidated contract employees who were mainly contract teachers. This was implemented with effect from July 2014 and the financial impact of the revision is Nu 15.86 mn per annum.

Also based on the resolution of the NA the salary of instructors of Early Child Care and Development (ECCD) programs was increased by 40% at par with those of the Non-Formal Education Instructors as recommended by the National Council. The annual additional financial implication is Nu 5.07 mn and came into effect from 1st July 2014.

The NA had asked the MoF to study the feasibility of paying DSA for Gyadrungs and Tshogpas. The MoF has also said that it was not able to justify the lump sum amount for travel within the Gewog for Gyadrung and Tshogpa.

With regard to Foreign Service Entitlements the NA based on the recommendation from NC had directed the MoF, Ministry of Foreign Affairs (MFA) and the Royal Civil Service Commission to discuss and arrive at a solution on the problems faced.

As per the MoF report the three agencies met and discussed the issue. Based on the submission of the MFA, the joint meeting decided to allow the continuation of actual expenses for transport of personal effect on transfer to headquarters as an option to the lump sum allowance. With regard to Home leave passage and furnished accommodation, it was agreed that it will be as per the notification issued by MoF on revision of allowances and benefits.

A task force with representation from MoF, MFA and RCSC will also be formed to review the Foreign Service rules and regulations.

Based on the recommendation of the NC approved by the NA the MoF has said that DSA for MPs, Constitutional Post Holders, government secretaries, OAG, privy council members and Thrompons in the country will be actual lodging in one room plus Nu 800 or lump sum DA of 1,500 instead of the earlier upper limit of Nu 3000 in one room plus DSA. For the same category in India it will also be actual lodging plus Nu 2,000 or a lump sum of Nu 6,500 in state capitals instead of an earlier upper limit of Nu 12,000 plus DSA and in other places it will be the actual lodging plus Nu 1500 or a lump sum of Nu 4500 instead of the earlier upper limit of Nu 8,000 for a room plus DSA.

The National Council had recommended the government establish free basic sport facilities in all Dzongkhags in order to provide equal access and benefits to the youth. The NA  had approved the recommendation and resolved that the concerned ministries should look into the matter.

The MoF said it will implement the recommendation and would seek proposals from relevant agencies.

On concerns expressed over the economy, the MoF is coordinating a multi-sectoral committee called Macroeconomic Framework Coordination Committee (MFCC) comprising of head of key economic agencies and this committee has already assumed the responsibility to manage the economy supported by the Macroeconomic Framework Coordination Technical Committee (MFCTC). The committee meets quarterly to review the performance of the economy and recommends appropriate policy actions.

The MoF shot down the NA’s recommendation to look into the possibilities of paying Human Resource Auditors allowances of 20% . Similarly it also turned down the NC’s recommendation to pay the secretariat officials of both the houses a professional allowance. The MoF says that a professional allowance is only in fields for which there is a scarcity of professionals like teaching, medical, audit and ACC.

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