The Ministry of Finance is likely to set up a "Market Equalisation Fund" for the Federal Board of Revenue (FBR) to give cash rewards to the tax officials, showing outstanding performance in surpassing revenue targets. Sources told Business Recorder here on Thursday that the issue of "Market Equalisation Fund" was discussed between the officials of Finance Ministry and the FBR during the last meeting of the Tax Advisory Council.
During the meeting, Minister of Finance Shaukat Tarin promised that a "Market Equalisation Fund" was to be established for monetarily rewarding the outstanding and good performing employees of the FBR. When contacted, a senior tax official said that the concept of the "Market Equalisation Fund" could be implemented with some reasonable funding of the government to introduce the reward system in the tax machinery.
Funding would be required from the government to implement the scheme, he said.
The sources said that the FBR was also taking measures to enhance the motivational level of the FBR employees for achieving the laid down revenue targets. The employee of the month and quarter would be selected on the basis of certain objectives performance criterion, as to who would be awarded with suitable medals and whose photographs along with the brief description of their performance be displayed at prominent entry points of the FBR building, Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs), the officials added.
A tax expert opined that a new compensation scheme was needed for tax employees to directly link incentives/pay with their performance to discourage corrupt practices within the tax machinery. The proposed scheme should provide incentives and market-based salary packages to those showing high levels of performance in the tax administration, said the officials.
At present, the special allowance (double pay package) seems to be unable to fully motivate tax officials to show high level of performance. The major focus of the new scheme is to provide a new allowance designed to raise compensation to a level that is not excessively out of line with the market salary.
Secondly, it would propose incentives for high levels of performance, and thirdly the scheme would discourage corrupt behaviour among the tax officials. The officials said the new compensation scheme should be implemented in conjunction with the new "job classification system."