The Bhutanese Leading the way.
The earlier Nu 1 million (mn) that MPs got as a lumpsum amount to buy vehicles has been enhanced to Nu 2.5 mn with the additional amount being released in June 2025 to the MPs.
A senior government official said the amount was not a monetization of the vehicle quota or ‘Prado Quota’ of the MPs, but an enhancement of the lumpsum amount.
Going forward, all future MPs are also expected to get Nu 2.5 mn as a lumpsum amount.
Summer Session
The matter came to a head during the Summer Session of Parliament, which had scheduled the Finance Minister to present, on 28th May 2025, an Action Taken Report on the Parliamentary Entitlements (Amendment) Bill and the Pay Structure Reform (Amendment) Bill, along with a status report on the implementation of Sections 61 and 62 of the Pay Structure Reform Act, 2022.
This was in accordance with the resolution passed by the National Assembly during the Winter Session in November 2024.
However, the Speaker, with the consent and vote from the Members of the National Assembly, decided to postpone the presentation.
A MP, on the condition of anonymity, said that in the plenary session, it was already made clear that this would have to be postponed, and there was an understanding that the government was trying to resolve the issue without having to deliberate and vote on the above laws.
Rock and a Hard Place
The choice, in some respects, was between a rock and a hard place for the government.
The MPs, irrespective of party affiliation, and without a vehicle quota, were determined to get a duty vehicle of Toyota Fortuner with a full time duty driver based on the Pay Structure Reform Act, 2022 or if that was not possible, then based on the Parliamentary Entitlements (Amendment) Bill 2024, bring back the vehicle quota for themselves and in the process also for all civil servants by amending the Pay Structure Reform Act, 2022.
The MP said that in the first option the Pay Structure Reform Act, 2022 under section 61 itself lists that MPs are entitled to a designated duty vehicle up to 2,800 cc (Toyota Fortuner).
The current cost of a Toyota Fortuner is around Nu 4 mn without sales tax and custom duty and a green tax of around Nu 1 mn which would take the total to around Nu 5 mn per Fortuner for any government agency buying them.
Minus ministers, Speaker and the National Council Chairman, there are 60 MPs needing 60 new Toyota Fortuners which would cost around Nu 300 mn. This also means that 60 new drivers have to be hired and their total monthly cost inclusive of basic pay and PF will be Nu 25,000 per month which will mean a monthly salary bill of Nu 1.5 mn in total or an annual pay of Nu 18 mn.
This is just the salary as since the MPs have to keep traveling the drivers’ DSA would also have to be borne by the government.
Fuel costs will have to be borne by the government, and so if the average monthly fuel consumption is Nu 10,000 then the annual fuel cost will be Nu 7.2 mn.
This is not taking into account repair and maintenance, which itself will run into millions and also increase in pay of drivers over time along with other benefits.
This is not accounting for misuse, damages, accidents and other issues which would add up costs even more including replacement of the vehicles.
The second option of bringing back the vehicle quota was a real possibility. In the Winter Session on 26th November 2024 when the National Assembly, deliberated the Parliamentary Entitlement Amendment Bill 2024 section wise, it approved section 20 which brought back the Prado quota.
There was a lot of public criticism and the Bill was not passed at the time, but it was also not withdrawn completely with the Finance Minister being asked to present a report, as mentioned above.
The MP said the second time around, the MPs had the option of bringing back the vehicle quotas not only for themselves, for which they were criticized the first time, but for all civil servants which would have made it more palatable for all.
A government official said, bringing back the quotas for MPs and all civil servants would defeat the Clean Wage reforms represented by the Pay Structure Reform Act, 2022.
Between the option of providing expensive duty vehicles with even more expensive associated costs over time and bringing back vehicle quotas for all, including civil servants, the least expensive way was thought to be to hike the lumpsum amount from Nu 1 mn to Nu 2.5 mn.
Logic of giving the Nu 1.5 mn
It was felt that the current Nu 1 mn was enough to buy only an Alto (around Nu 800,000) or a WagonR (around Nu 900,000) at best, and so the amount was inadequate to buy a proper vehicle, especially after the removal of the tax benefits of the quota.
This was compared to even government directors driving SUVs and with duty drivers, and ground reality of even medium sized vehicles now costing between Nu 1.8 mn to Nu 2 mn plus.
It was felt that the amount would allow a dignified solution for the MPs, give them confidence to serve well, prevent a ‘poor person mentality’ while serving and also how they see themselves, especially in comparison to MPs and officials abroad.
There was also a concern that if Bhutan is to get good quality candidates, then there should be some incentives for MPs especially given the sacrifice, they make in giving up steady jobs or businesses and the cooling down period after elections.
The concern also was that if MPs brought back vehicle quotas, then it would undermine the Clean Wage reforms and also lead to undesirable practices like selling of quotas.
There has been a predictable and major public backlash, especially online, over the enhancement, but the position is to ride out the criticism in the longer term interest and given the more expensive options.
The MP said the Pay Structure Reform Act, 2022 section 61 says ‘The designated duty vehicle shall be maintained at existing level to position level EX3 and above including Members of Parliament until reviewed and rationalized by the Government.’
The MP said the Nu 1.5 mn additional amount can be interpreted as the government having done review and rationalization on this front and having decided to give an additional Nu 1.5 mn instead of the Toyota Fortuner duty vehicle as mandated by the Act.
The MP also pointed out that Pay Structure Reform Act, 2022 while repealing the Pay Revision Act 2017, Pay Revision Act of Bhutan 2019, and the Pay Revision (Amendment) Act of Bhutan 2020 had failed to repeal the Parliamentary Entitlements Act 2014 which meant that legally the vehicle quotas for MPs still existed.
Druk Nyamrup Tshogpa (DNT) leader and former Finance Minister Namgay Tshering criticized the Nu 1.5 mn saying the ‘quota monetization’ undermines the reforms of the past, and the public is not happy. He said such funds can be invested for other things where the need is more.
The MP said that the former government and Parliament conveniently took the quotas and then legislated a law taking it away from future MPs.
Currently, a Prado costs Nu 17.86 mn including taxes of 65% Bhutan sales tax, 55% Custom Duty and 30% Green Tax and only Nu 8.9 mn after a Prado Quota inclusive of the green tax. This means a Prado Quota is currently worth Nu 8.2 mn.
The MP said that before the GST and Excise Bill came to Parliament, he heard that a former minister had sold his Prado Quota for Nu 4 mn, especially since quotas have become very rare with it being done away with.
The MP said they have no issues in giving up the ‘Prado quota’ as long as they can get a decent vehicle to do their work in the absence of duty cars and duty drivers.
Background
The issue goes back all the way to the first Parliament when there was some debate on whether MPs should get duty vehicles or not and so the Parliamentary Entitlement Act 2008 opted instead to go the for cheaper option of Nu 700,000 lump sum, vehicle quota with no need to pay custom duty and driver allowance of Nu 6,000 and fuel and maintenance allowances of Nu 7,000.
This lumpsum amount was hiked to Nu 1 mn in the Parliamentary Entitlement Bill, 2014 and the quota was reclassified as ‘Exemption of customs duty and sales tax for purchase of a vehicle not exceeding 3,000 cc.
In 2019 on the recommendation of the Pay Commission, the driver and fuel allowance were hiked to Nu 10,000 each.
The 2022 saw the Clean Wage Reforms that did away with vehicle quotas for all including civil servants in the form of the Pay Structure Reform Act, 2022. The MPs back then saw the matter differently as they felt in the absence of a duty vehicle, which even senior civil servants get, the quota was a fall back and so they legislated the option of a Toyota Fortuner (2800 cc) duty vehicle for MPs into the Act.
The new and Fourth Parliament that came in made it an issue from the start and asked why were they not getting their duty vehicles as per the Act. The first query was made by the National Council MPs who were elected first, but they were told that all they would get is the Nu 1 mn lumpsum and the driver and fuel allowances.
In fact, on 5th February 2024, the National Assembly MPs had their first plenary session, and one of the outcomes of the session was a 14th February 2024 letter signed by the Speaker addressed to the Prime Minister’s Office (PMO) asking for 2,800 cc designated vehicles for MPs as per the Pay Structure Reform Act, 2022.
The letter pointed out that Nu 1 mn is not enough to buy a duty vehicle. Then different provisions of the Act were cited.
At the time, the NA MPs declined to take the Nu 1 mn lumpsum amount that their NC colleagues had already taken.
The Ministry of Finance, however, made clear its inability to provide such vehicles as no new vehicles were being bought.
This was followed up by a second letter to the PMO in early 2024 from the NA House Committee again signed by the Speaker which asked for the lumpsum amount to be enhanced to Nu 2.5 mn from the current Nu 1 mn.
The letter stated, “The House Committee of the National Assembly has thus decided and proposes an amount of Nu 2.5 mn.”
The letter mentioned the amount will enable the MPs to buy duty vehicles with their vehicle quota being discontinued. However, there was no response from the PMO.
The MPs then decided to take up the matters in a legislative way, and on 21st May 2024 a press release by the National Assembly (NA) pointed out that one of the motions expected during the upcoming NA session is ‘Inconsistency between the practice and the intent of the Pay Structure Reform Act, 2022.’
The government worked behind the scenes and managed to convince the NA MPs to withdraw this motion saying that the government is working on a solution.
However, the Ministry of Finance took a tough stance and refused to budge. It was then that the NA MPs decided to bring forth both the Parliamentary Entitlements (Amendment) Bill and the Pay Structure Reform (Amendment) Bill.
The NA MPs on 26th November 2024 while deliberating the Parliamentary Entitlements (Amendment) Bill section wise apart from approving the Prado quota also approved the other new benefits like a one-time lumpsum amount as Joining Expense, a lumpsum amount to purchase laptop, iPad and printer as Equipment Allowance, annual discretionary grant (which had been originally prorated monthly at Nu 12,500 per month and already added to the pay of MPs in 2022), a well-furnished office, and a special gratuity rate two and a half times the last monthly salary into the number of years.
This paper published an online story on the issue pointing this out, which was widely read and started fueling strong reactions on social media and other forums over the quota being brought back for MPs.
The Bill was supposed to be passed on 27th November but the public address system of the Parliament did not function on Wednesday the 27th November, and the session was adjourned.
This paper published another online piece on the issue which also went viral.
As word of the MPs moves spread, online and offline, pressure built up as various people came out on Facebook posts, TikTok videos, comments section and criticized the move by the MPs for their Prado Quota and thobthangs.
Bowing to public pressure, the NA MPs did not pass the Parliamentary Entitlements (Amendment) Bill but they also did not withdraw it, and asked the Finance Minister to present a report in the Summer Session in 2025.
