The Bhutanese Leading the way.
The much-discussed Vehicle Quota took the Parliament by storm this time which has calmed down for now with a deferral, but the storm may rise in the summer session again when the issue is likely to be discussed again.
On 21st November 2024 the motion to table the Pay Structure Reform Act of Bhutan 2022 that did away with vehicle quotas was passed. The motion pointed out that the vehicle quota was needed and so the push was to amend this Act to bring back quotas for both MPs and Civil Servants.
Then after backlash over the Parliamentary Entitlement Act Amendment Bill due to Prado Quotas and other new allowances for MPs, the National Assembly (NA) MPs backtracked and instead the NA directed the government to report on the implementation of Sections 61 and 62 of the Pay Structure Reform Act 2022 and also submit a report during the summer session.
The above means the vehicle quota issue will come up again in the summer session.
With the Finance Ministry to play an important role in submitting the report asked for by the NA, it is important to understand the position of the Ministry.
Also, with the NA passing a motion to table the Pay Structure Reform Act 2022 for amendment it is also important to understand why the OAG calls this motion as not being consistent with the Constitution.
Finance Minister says no to quota
Lyonpo Lekey Dorji said that the system of providing vehicle quota was introduced in the 1980s, at a time when public transport, buses and taxis were almost non-existent. The main objective was to facilitate the import of foreign vehicles for public servants and to minimize the pressure on a limited number of Government pool vehicles. It was also aimed at easing the mobility of the public servants while conducting their official duty and to standardize the import of foreign vehicles into the country.
The civil servants and public servants in P3 level and above were entitled for a vehicle quota, free of customs duty and sales tax exempted up to a ceiling of Nu.0.800 million after every 7 years of import. Later this was extended to a few public servants including the Local Government officials.
The Members of the Parliament were entitled for a one-time quota free of customs duty and sales tax exempted up to a ceiling of 3,000cc per term. Since the Members of the Parliament are not provided with a designated vehicle, the vehicle quota along with a lumpsum amount (currently Nu.10 lakhs lumpsum per term) was provided to facilitate mobility of the Members of the Parliament.
The Pay Structure Reform Act 2022 removed this duty-free quota for all to achieve the objective of clean wage, to reduce disparity in the salary and allowances across the sectors, and most importantly, to rectify the skewed vehicle market situations in the country.
Lyonpo said that since the motion to amend the Pay Structure Reform act of Bhutan 2022 has been adopted in the current session of the National Assembly, the Government will have to review and make an informed decision, and report to the House.
“This quota system is skewing our vehicle imports and we in the Ministry of Finance do not recommend reinstating the old quota system which have been removed by the pay commission during the third government.”
“You must have realized by now, that the Finance Minister and the Finance Ministry are not the most popular with public servants, but we have a responsibility to uphold as the custodian of our economy and the treasury, and we cannot, in the right frame of mind, recommend reinstating the quota system for anybody,” he added.
Why OAG says it is illegal
The Bhutanese has gained access to the legal advice given by the Office of Attorney General (OAG) to the Cabinet laying out the legality of the amendment of the Pay Structure Reform Act 2022.
The OAG analyzed the Constitution, NA Act of 2008, Rules of Procedure of the NA 2008, Public Finance Act 2012 and Pay Revision Act of Bhutan 2023.
The OAG concluded that based on the provisions of the Constitution, Pay Revision Act and its analysis, the OAG concludes that any amendment to the Act without following the Constitutional process is not consistent with Article 30 read with Article 14 (Finance, Trade and Commerce) of the Constitution and is tantamount to withdrawing money without following due process.
The OAG letter says that Article 30(1) of the Constitution state, “There shall be a Pay Commission headed by a Chairperson, which shall be autonomous and shall be constituted, from time to time on the recommendation of the Prime Minister.”
The OAG says this section stipulates an impartial body, the Pay Commission, shall be constituted on the recommendation of the PM. The OAG says this article not only prevents personal interest and direct participation of Parliamentarians in respect of their entitlements, but also ensures that the legislatives bodies such as the National Assembly does not encroach upon the power of the PM to recommend for the constitution of the Pay Commission.
Article 30 (2) says, “The Pay Commission shall recommend to the Government revisions in the structure of the salary, allowances, benefits, and other emoluments of the Royal Civil Service, the Judiciary, the members of Parliament and Local Governments, the holders and the members of constitutional offices and all other public servants with due regard to the economy of the Kingdom and other provisions of this Constitution.”
The OAG says this section establishes that since the Pay Commission is required to recommend revisions to the salary, allowances, benefits, and other emoluments of the above, consequently any recommendations for changes in pay, allowances and benefits must originate from the Pay Commission.
As per Article 30(3), “The recommendations of the Commission shall be implemented only on the approval of the Lhengye Zhungtshog and subject to such conditions and modifications as may be made by Parliament.”
The OAG says this section requires the Pay Commission’s recommendation to be approved by the Cabinet and are subject to any conditions or modifications that may be imposed by Parliament.
Government’s stance
The Health Minister Tandin Wangchuk meanwhile said that the government is not in favor of amending the Pay Structure Reform Act 2022 as it has just been changed and it is too early to make changes.
However, he said the 9 ministers and Prime Minister make up 10 people in the NA and minus the speaker there are 36 MPs who make the majority and who prevail.
The Health Minister said the MPs do have needs but it is an issue of placing priorities.
Lyonpo said that the voice of the finance minister in the NA actually represented the position of the government.
A source said that the finance ministry and the government in its report will likely recommend against the vehicle quota.
The source also said that Sections 61 and 62 of the Pay Structure Reform Act 2022 that have to do with MPs vehicles is already implemented since they took the lumpsum of Nu 1 mn each.
