The Central Board of Revenue (CBR) is examining a study of the World Bank (WB) on salary and bonus in revenue departments to make "Unified Reward Rules 2005" more viable.
Sources told Business Recorder on Sunday that the new reward rules would be finalised in the next Board-in-Council meeting. The CBR has asked all the line and private members to examine the World Bank study for any amendment in the proposed rules.
The study has been conducted many years back, whereas the CBR is considering the same for the implementation of the new reward system for the tax officials.
The CBR has termed bonus as an important part of the unified reward rules 2005. On the other hand, the study concluded that there was no evidence that bonus could automatically improve the working of revenue departments.
They said that the study has given an in-depth analysis on bonus and rewards system. It specified that many revenue departments offer bonus in hope of improving worker performance. But such mechanisms pose enormous risks and require careful design and cautious implementation.
The sources said the WB study analysed the bonus systems applied by revenue authorities in seven countries and was complemented by questionnaires completed by tax and customs administrations in seven others.
Though the sample was small, the study generated interesting findings requiring further analysis. The countries analysed indicate that bonus systems are fraught with danger so must be designed with utmost care. There is no evidence that bonuses automatically increase the effectiveness of revenue departments.
If staff performance is influenced by factors other than salaries and bonuses, it is not easy to determine the effects of such system. This note reviews reasons for introducing bonus systems and discusses a number of crucial design features, particularly the importance of effective and transparent performance appraisal systems based on clear performance measures.
The sources said that the CBR would incorporate all the viable recommendations floated by the CBR members in the new rules.
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