PM seeks relaxation in honorarium policy

President, PM may grant unlimited performance rewards as govt pursues austerity

ISLAMABAD:

Prime Minister Shehbaz Sharif has directed a relaxation in the honorarium policy to enable him and the President of Pakistan to grant as many performance honoraria as they deem appropriate to employees of the two highest offices of the country due to their "unique nature of work".

The instructions have been issued in the midst of the government's austerity policy to save Rs27 billion to partly fund imported fuels. The Prime Minister's Office believes that staff and officers of the highest offices need to be compensated more due to the extra work they do beyond normal duty hours.

Government sources told The Express Tribune that the prime minister late last month asked the Ministry of Finance to change the policy, which was approved last year for the grant of honorarium to officials and officers of the federal government. The cabinet had approved the honorarium policy in June last year to streamline rewards that bureaucrats and low-paid employees receive over and above their standard salaries.

"In view of the unique nature of work and duties in the President's Secretariat and the Prime Minister's Office, the prime minister has been pleased to direct that the two offices be excluded from the purview of the Policy for Grant of Honorarium, 2025, to the extent of determination of number and quantum of honorarium admissible to the employees of the two offices," reads the instructions issued to the finance ministry. If these instructions are implemented and the policy is revised by the federal cabinet, the prime minister and the president can give an unlimited number of honorariums and amounts to staff and officers of the two highest offices.

A senior finance ministry official confirmed that the ministry had received the instructions but said no action had been takenWhen contacted the so far. the PM's Office said the purpose of the fresh instructions was only to regulate the honorariums for these two offices and bring more discipline.

Sharif further instructed that the authority to determine performance rewards should be given to the president and the prime minister respectively. A PM Office official said the objective of authorising the PM and president to grant these honorariums is that the head of state and head of government can truly assess the performance of their officers.

The instructions further state that the finance ministry should move a summary for cabinet approval to amend the 2025 policy.When contacted, the Cabinet Division said it has not yet received any new summary from the finance ministry to secure fresh cabinet approval.

The government has also slashed Rs173 billion from the federal development fund to subsidise high-speed diesel prices. Meanwhile, the Petroleum Division has reached out to the finance ministry with a request to release Rs57 billion more on account of price differential claims of oil refineries.

The Petroleum Division said it had been approached by numerous oil marketing companies (OMCs), particularly PSO, highlighting their inability to clear outstanding payables to refineries. This situation has raised serious concerns regarding the uninterrupted operations of OMCs, refineries and the overall fuel supply chain, said the petroleum division. It has requested the finance ministry to expedite the release of verified claims of OMCs, especially PSO, to enable them to meet their financial obligations and ensure continuity of supply.

Under the existing honorarium policy, the tax rate for budget and performance honorariums is far lower than standard income tax rates. According to the policy, "taxation of honorarium will be on the lines of taxation of monetization allowance". The bureaucrats receiving monetisation allowance pay only 5% income tax on the amount that they receive as monetisation allowance.