The Ministry of Finance has requested Prime Minister Yousuf Raza Gilani to de-freeze the special allowance on the basic pay of the employees of the Federal Board of Revenue, fulfilling a major demand of the tax machinery. Sources told Business Recorder on Saturday that the Finance Ministry has moved a summary to the PM on special dispensation against freezing of special allowance equal to 100 percent of basic pay of the employees of FBR and its field formations.
According to the sources, background of the case is that in 2005, an allowance equal to 100% of the salary of officers posted at Larger Taxpayer Unit (LTU), Lahore and Medium Taxpayer Units (MTUs), Rawalpindi, Karachi, Quetta, Peshawar and Islamabad was granted with effect from the date of their joining those units. Later on, in 2006, the same allowance was also extended to the officers/officials of FBR and its field formations.
The FBR is of the view that it has evolved guiding principles for entitlement, continuation/ discontinuation and duration for payment of special allowance and under these guiding principles the allowance has been turned into "performance allowance," which is not paid to all the employees across the board. It is given only to those employees who qualify specific exam/criteria through Internal Job Description. Hence, FBR has further stated that grant of special allowance to its employees is different from the other departments who are drawing this privilege as a part of their pay and it is not an allowance provided to all employees of the FBR, but is in the form of a reward for improving revenue collection.
Sources said that the Federal Revenue Alliance Employees Union is also striving for the same. The Chairman, FBR is quite anxious for its de-freezing as he is of the view it is impacting tax collection and some of the employees are on strike. While there appears to be weight in FBR's argument for de-freezing Special Allowance, it may be stated, if their requests is agreed to, it may lead to similar demands by other Departments, like the armed forces, police, national highway and motorway police etc.
It may also be added that those organisations which are getting 100% ad hoc Special Allowance, were not given 50% increase ad hoc Allowance granted to Government employees with effect from July 1, 2010 except for the FBR. Therefore, it is proposed that the above matter be referred to the Committee recently set up by the Finance Division under Dr Ishrat Hussain which is examining structure of pay and allowances, etc, being offered by different Government Departments to their employees.
The Ministry of Finance proposed the PM that the request of FBR may be considered for uncapping the special allowance and may allow it on Basic Pay on the basis of 2011 Scales. It may be renamed as "Performance Allowance" to be granted only to those employees of FBR who meets the laid down criteria/ guidelines. The FBR Chairman may be advised to proceed against those employees of FBR under Efficiency & Discipline Rules who have resorted to strike and obstructing the discharge of official work, sources added.
Meanwhile, the FBR's note to the Ministry of Finance said that it may be mentioned that in the year 2001 the employees of Federal Board of Revenue were allowed special allowance equal to 100% of the basic pay as living wage for their integrity management, improving image amongst the stakeholders and to increase revenue collection under Tax Administrations Reforms Project. The living wage concept provides specific guidelines for evolving specific selection criteria, identification of specific jobs within the organisations and the continuity or otherwise of the payment of special allowance.
The criteria evolved to allow special allowance was that the special allowance is to be paid against predefined special post requiring skills and competencies. The FBR personnel are to be posted through a transparent, merit based competitive selection process. The continuity of special allowance is to be ensured through periodic review of performance of employees of FBR.
The payment of allowance (living wage) has highly motivated the work whole heatedly to achieve revenue targets set by the FBR. Freezing of the allowance wef July 1, 2011 however, have impacted the revenue collection. Keeping in view the increased living cost and to boost the morale and effectiveness of tax machinery, Finance Ministry may kindly approve restoration/de-freezing of Special Allowance equivalent to 100% of basic running pay wef July 1, 2011, FBR added.