Islamabad:
A Cabinet agency on Monday approved a new honorary policy for public officials, giving discretionary powers to the Minister of Finance to approve as many as budgetary fees for employees of the economic ministries, the Parliament and the Office of the Prime Minister, according to an official statement.
Directed by the Minister of Finance, Muhammad Aurengzeb, the Economic Coordination Committee (ECC) of the Cabinet “approved a summary of the Finance Division, which describes the policy for the granting of fees to government employees,” he said.
The ECC authorized the Minister of Finance to “grant a budget honorary to employees published in the Finance Division, the Income Division, the Federal Income Board (FBR), the Division of Planning, Development and Special Initiatives, Secretariat of the National Assembly, Secretariat of the Senate and the Prime Minister’s Office”, according to the newly approved policy.
“The amount of budget honorary for each financial year will be decided by the Minister of Finance,” reads the new policy that grants discretionary powers to the Minister of Finance to distribute as many budgetary fees as he or she considers that he adjusts without a higher limit.
The tax rate for these budget fees will also be much lower than standard income tax rates. According to the policy that is subject to the approval of the Federal Cabinet, “Honorary Taxes will be in the Tax Lines of the Monetization Assignment.” Bureaucrats receiving monetization subsidy pay only 5% in the Income Tax on the amount they receive as a monetization allocation.
“The tax on payments under the mandatory monetization of the transport center for public officials in BS-20 to BS-22 (as reduced by driver’s salary deduction) will be charged at a rate of 5% as a separate income block,” reads the Income Tax Law.
In response to the consultations of the Express PAkGazette, the Minister of Finance, Muhammad Aurengzeb, said that “the concession of the budget honorary has always been with the Minister of Finance as president of the ECC.”
He added that the Minister of Finance was in the best position to evaluate efforts in the exercise of the budget, since his work involved working closely with all the economic ministries associated with the formulation and implementation of the budget.
“Secondly, the alleged discretionary power is exercised on the recommendations of the Honorary and Paos Committees and is subject to a delegated evaluation within the constituent units of each ministry,” added the minister.
Reposting another question about the tax rate of these fees, the Minister of Finance declared that the “budget honorary is a unique reward regime and, therefore, taxed at a different rate from the salary.”
In general, the new policy optimizes the rewards that bureaucrats obtain more from their standard salaries. Currently, federal secretaries have been authorized to give an honorary to the 18th grade officers in a fiscal year.
Above the 18th grade, the approval of the president of ECC was required. According to the new policy, the federal secretary will have to be able to give an honorary to all employees, except themselves.
A new reward category for all federal government employees is also announced. Currently, there is no reward regime for high -performance people in the federal government, which is demotivating high performance employees, according to the Ministry of Finance.
Now, it has been decided that the federal secretary can grant an honorary performance equal to a basic payment, in an outstanding yield, no more than 25% of employees from a ministry or division in BPS 1-22, except for itself. The Federal Secretary’s honorary will be decided by the Federal Minister, according to the decision.
With the exception of an annual reward, a reward of yield and as many budgetary rewards such as the Minister of Finance wishes, other fees will not be granted, including those associated with religious festivals such as EID and Christmas, according to the new policy. Employees who have received the budget honorary will not be eligible for the granting of the ordinary and performance honorary.
The new policy establishes that no honorary will be paid in cash and that all honorary payments must be reflected in payroll states. The performance honorary will not be granted by a ministry, if the employee has not served in said ministry for less than six months.
It will not be granted honorary, except the honorary of outstanding performance, before May 1, in any financial year. Employees who have received the budget honorary will not be eligible for the granting of the ordinary and performance honorary.
If the ordinary and performance honorary has already been granted to an employee, who is given an budget honorary, the amount of budget honorary will be adjusted against the yield of performance already drawn. No employee will receive honorary from more than one organization.
Meanwhile, ECC approved RS61.2 billion in complementary grants for several ministries, mainly for the payment of short -term debt. Approved RS1.7 billion for the Ministry of Defense “for the technological update of the ISPR”, according to the Ministry of Finance.
The meeting approved RS1.3 billion in subsidy so that the Ministry of Finance returns the amount to the Sindh government as unused funds of the cash reimbursement program Wheat Seed. RS40.3 billion approved for the Division of Economic Affairs due to the budget estimates reviewed for fiscal year2024-25 for the reimbursement of foreign loan loans in the short term.
The ECC also approved a summary of the Energy Division for the approval of a Tripartite Energy Purchase Agreement of 1,145 MW Karachi Nuclear Plant Unit-2 (K-2) and UNIT-3 (K-3) in Karachi.
The ECC considered a summary of the Ministry of Commerce and approved an amendment in the Import Policy Order (OPI) for state defense production entities and their commercial property subsidiaries. The ECC also approved a summary of the Ministry of Housing for the Retirement of the Directives for the transfer of the Hyderabad package and the Karachi package of the Sindh government to PIDCL.
