Bhutan: Clean wage system likely to be discussed in Winter Parliament


The finance ministry (MoF) and Royal Civil Service Commission (RCSC) are working to replace the current pay and allowances system with a clean wage system.

According to the RCSC annual report 2021-22, under a clean wage system, civil servants will get a pay package without hidden benefits.

The existing system of pay and allowances is complex, with more than 25 different allowances paid to civil servants.

The report states that these allowances are taxable, non-taxable, as well as discretionary in nature. “This creates an administrative burden; compromises transparency and accountability of public expenditures; encourages corrupt practices; and increases the overhead cost of the civil service.”

Furthermore, it states that the current pay’s narrow salary band does not provide the bandwidth to support a robust performance management system.

According to the RCSC, the proposal is to first move towards payment based on a clean wage system which is budget-neutral in the initial years and in the near future introduce performance-based incentives that support a well-functioning civil service.

The intention of this reform initiative is to ensure that civil servants who execute the most significant function of implementing development programs are paid equally for their work.

“Overall, the reform intends to increase the average remuneration, allowance, and benefits through savings as a result of right-sizing and reorganisations,” the report states.

The report states that it is still a work in progress and the MoF is leading the workstream.

However, it was learnt the clean wage system will be instituted only after forming the pay commission. So far the government has not formed a pay commission for the clean wage system.

It was also learnt that it will be tabled during the Winter Parliament session which is held normally in November.