ISLAMABAD: The Federal Board of Revenue (FBR), led by Chairman Rashid Langrial, has proposed a performance management regime that includes substantial financial incentives totaling Rs. 8 billion for the current and next fiscal years.
Business Recorder reported, citing sources, that the plan, presented to the Economic Coordination Committee (ECC), aims to enhance efficiency and fairness in tax collection through performance-based bonuses and allowances.
The FBR’s proposal seeks Rs. 2.474 billion as a performance bonus for the last six months of FY2024-25 (January–June 2025) and an estimated Rs. 5.44 billion for FY2025-26. Under the plan, high-performing officers could receive up to four basic salaries as a reward, while low performers would get no additional incentives. The overall financial implication would be equivalent to two basic salaries per month for officers from BS-17 to BS-22.
Additionally, the proposal includes a Rs. 200,000 monthly allowance for 30 officers in the newly established Reform Delivery Unit, amounting to Rs. 54 million for FY2024-25 and Rs. 79.2 million for FY2025-26. This unit, tasked with implementing the FBR transformation plan approved in September 2024, will drive systematic reforms to improve tax collection efficiency.
The FBR highlighted its current tax expenditure-to-collection ratio of 6.45%, significantly higher than India’s 0.79%, underscoring the need for reform. The incentives are designed to create performance-based differentials, motivating officers to prioritize fair tax assessments while ensuring compliance. The plan also proposes disbursing bonuses quarterly, beginning in January 2025, following assessments for the October–December 2024 quarter.
The financial structure of the proposed incentives includes:
- Rs. 2.474 billion for performance bonuses in FY2024-25.
- Rs. 5.44 billion for performance bonuses in FY2025-26, incorporating a 10% increase in basic salaries.
- Rs. 54 million for Reform Delivery Unit allowances in FY2024-25.
- Rs. 79.2 million for Reform Delivery Unit allowances in FY2025-26.
Despite opposition within the ECC regarding the financial burden, the FBR emphasized the necessity of the reforms for fiscal stability. The proposal aligns with Section 4 of the FBR Act-2007, allowing the agency to implement performance management regimes. If approved, the incentives regime will replace existing rewards, except in cases of exceptional achievements.
