Lust for cars: Bureaucrats exploit loopholes in car monetisation

After numerous reports of misuse of cars, the Public Accounts Committee seeks report from finance ministry.

ISLAMABAD:

Misuse of official cars is continuing by almost all top bureaucrats in the country despite purchase of official cars at throwaway prices and receiving monthly car allowance.

This blatant misuse of the compulsory car monetisation policy has forced the government to consider plugging loopholes deliberately built into the original policy.

As a first step, the government on Monday imposed a 5 percent income tax on the monthly car allowance given to top bureaucrats. The move comes hardly five months after implementation of the compulsory policy and demonstrates the unwillingness of bureaucracy to comply with rules even after handsome encashment of benefits.

According to the statutory regulatory order issued by Federal Board of Revenue (FBR), “the tax on payment under the compulsory monetisation of transport facility for civil servants in basic pay scales 20 to 22 shall be charged at the rate of 5 per cent as a separate block of income”. The tax will be calculated after excluding Rs10,000 in monthly driver salary.

After numerous reports of misuse of cars, the Public Accounts Committee (PAC) has already sought a detailed report from the finance ministry in this regard. The PAC also grilled Communication Secretary Anwar Ahmad Khan for using a luxury vehicle despite availing benefits under the monetization policy.

The government is also actively considering eliminating the pool of cars maintained in every ministry for protocol and official use and the proposal has already been discussed with cabinet division, said informed sources. Additionally, the government is also considering writing stern letters to secretaries of all ministries who are misusing vehicles or are overlooking misuse in their ministries, said the sources.

Currently, a grade 22 officer is paid Rs98,000 per month, grade 21 officer Rs78,000 and grade 20 officer is paid Rs68,000 inclusive of Rs10,000 driver salary. In many cases, well-maintained cars of 2006 models were sold to these top bureaucrats at prices ranging from Rs200,000 to Rs256,000. However, many bureaucrats have parked their cars at their residences and are once again riding ministry pool cars, said an official of administration wing of the finance ministry.

Bureaucrats left a major policy lacuna in rule (iii) issued for compulsory monetisation whereby ministries, divisions and departments were allowed to maintain a limited pool of vehicles (1000/800-cc) for general duties. In addition, one 1300-cc vehicle was allowed to be maintained for protocol/operational duty by entitled officers.

According Press Information Department (PID), secretaries have been directed by Cabinet Division to check misuse of operational and general duty vehicles. All secretaries have categorically been conveyed that any officer found misusing official vehicle of project or body corporate in his/her ex-officio capacity shall be proceeded against under disciplinary rules.

However, while defending the monetization policy, PID has claimed that Rs1.5 billion have been saved during the current financial year, as this amount had been allocated for purchase of new vehicles.

Prospects of housing monetization have significantly dimmed after flagrant disregard of car monetization. Policymakers fear that bureaucrats will purchase official houses at cheap rates and the purpose of monetization will not be achieved. According to a proposal of the Planning Commission, housing monetization is expected to cost the exchequer Rs165 billion alone in the next financial year.

Published in The Express Tribune, May 29^th, 2012.