Why vehicle quota and allowances were removed and how PBI will work

Vehicle Quota Removal

One of the biggest changes in the Pay Restructure Reform Bill of Bhutan 2022 is the removal of the vehicle quota for civil servants and MPs.

A government official said that vehicle quota was removed for two reasons. The first is that vehicle quotas do not fulfill the basic principle of it helping people to do their jobs.

The official said that vehicle quota was considered a perk for a certain level of seniority and certain numbers of years in the civil service, but instead of that it will be more transparent to give higher pay at that level in the future.

The second reason for removing the vehicle quota was that it was making civil servants and even MPs engage in selling vehicle quotas for money which us not allowed and so it makes them do things which they should not.

This goes against the principal of cleaning up things in the civil service pay system.

However, for those public servants who are eligible for the vehicle import quota, it shall be retained as per eligibility until the effective date of this Act. This means that until 30 June 2023 if you become eligible for a quota you can take it.

The official said that the removal of the vehicle quota also supports the Bhutan Green and Sustainable Vision.

Pool Vehicles

In a leaked Clean Wage document there was a proposal to do away with away with pool vehicles and drivers in the second phase. This was widely expected to be in the Pay Bill but was visibly absent.

Instead the Bill says the designated duty vehicle shall be maintained at existing level to position level EX3 and above until reviewed and rationalized by the government.

Here the official said that even in the reform process it is listed in the later stages and pool vehicles cannot be removed immediately as firstly there is an economic cost to removing so many vehicles, secondly a social cost to removing around 1,800 drivers and thirdly it is yet to be figured out what kind of money can be given to officials to be able to move around without duty or pool vehicles.

In the longer term pool vehicles will undergo a reform process and are expected to be phased out but not right now.

Discretionary Allowance

The discretionary allowance for Dzongdas at Nu. 75,000 per annum is to be discontinued and shall form part of recurrent expenditure.

Here some people have said it is not fair as the same discretionary allowance for the Prime Minister at Nu 300,000, ministers at Nu 200,000 and MPs at Nu 150,000 has been allowed to continue as part of the monthly pay.

However, here the official said it is different as in the case of MPs they are elected heads and so they need this allowance as they have to keep meeting people and entertaining them.

In the case of Dzongdas there are no such obligations the so the same amount can be used from the current expenditure like if the Dzongda wants to give a lunch etc.

The official said that another change is that earlier the discretionary allowance of MPs was not taxed and now they will have to pay PIT tax on it. The other advantage is when this grant is given on a monthly basis it will not exhausted at once and if a MPs resigns then the incoming MP will get the money with no refund required.

In the current practice MPs take the entire allowance at the beginning of the year and exhaust it.

Sitting fees

The sitting fees for the Local Government ranging from Nu 5,000 to Nu 1,000 per sitting has been removed for Thrompons, Gups, Mangmis, Tshogpas and Theumis as it was thought that they should not be getting additional fees for what they are already elected and paid to do.

The logic also was that when MPs do not get such sitting fees then why should other elected heads collect them.

Teachers, Personal Pay and LE

The Bill says the practice of Personal pay shall be discontinued. However, the amount received as personal pay shall be subsumed in the monthly variable compensation under variable pay.

Personal pay came about because it was for people who exceeded the maximum possible pay allowed at a certain level due to increments etc. The official said that once people reach such a level they should either be moving up or not getting that extra pay.

The additional allowance for teachers based on Government approved Bhutan Professional Standards for Teachers (BPST) at Proficient Teacher: 10% /, Accomplished Teacher: 15%/ and Distinguished Teacher: 20% was discontinued.

Here the official said it was discontinued as it was never implemented in the first place and it makes no sense to have an allowance in place that is not being implemented. The official said that there are education reforms that are happening and new standards may come into place and when they do then they can be looked at.

The above also clashes with the Performance Based Incentive of the broader civil service.

A major change is that the Leave Encashment has been removed as an annual feature and so civil servants will get the 30 days leave encashment over 12 months.

The official said that the RCSC will come out with a leave policy where it will no longer be paid leave, but it will allow civil servants to take a certain number of leaves in a year.


There have been major cuts in the various allowances of foreign ministry officials posted abroad.

The practice of providing Representational Grant (RG) to individual foreign service members on a monthly basis shall be discontinued. The RG shall form part of the recurrent expenditure budget.

Here the official said the RG is actually meant to help diplomats and officers to meet people and entertain them etc but it was being treated as a part of the pay.

There were also instances of RG being given to people like accountants and others who did not have such work as a result people who truly needed the RG did not have enough.

The official said to make it fair and effective the RG is now part of the current budget of a mission or embassy and can be used from there.

The children education allowance provided for a member if the children are studying outside the place of posting besides Bhutan shall be discontinued.

The official said the whole point of the allowance is to help pay for the education of children who have been forced to move their school due to their parent’s transfer and it does not make sense if the parents are in one country and child is studying somewhere else.

The existing entitlement of the 20 feet container or truck for carriage of personal effects for transfer from Mission to headquarters or Mission to Mission shall be discontinued.

Here the official said that the diplomats will instead be given an updated container grant and it is up to them to use that money to take a container or not.

The official said the problem with the container was that firstly it was not fair for those who did not amass a lot of things abroad and secondly many of the items did not belong to them but were for third parties.


A major new feature is the performance based incentive comprising components that are linked to national, organizational and individual performances could be up to 100% of the annual basic pay of the public servant’s pay to drive meritocracy and to pay competitive salary packages.

The official said that here the PBI will only be implemented based on two conditions.

The first is that the RCSC will have to build a detailed Performance Management System that can measure the performance of not only agencies but also individuals.

The second condition is that the budget should have enough revenue or funds to give out PBI payments.

This makes it clear that PBI will be over and above the total pay of civil servants and can be even 100% of the pay.

A chunk of it will be paid to civil servants if the country’s economy does well and lot of national targets are met, the next chunk will be the performance of one’s agency and finally individual level performance.

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