Bureaucracy resists SRO withdrawal

ISLAMABAD: Top officials in bureaucracy are opposing withdrawal of a discretionary statutory regulatory order (SRO) which allows them immunity from higher taxation on their monetised transport allowance. The immunity was given to officials in Grade 20-22 by the PML-N government through an SRO issued on June 10, 2013, just two days ahead of the announcement of its first budget. These government officials are paying just 5 per cent tax on their monetised transport allowance. As per the normal income tax law, this amount should be clubbed with the total salary income of these officials, which may attract higher tax rates. Contrary to this, for salary people below the grade 20, the transport allowance is part of the total salary and subject to standard income tax slabs which resulted into higher tax collection. Dr Ikramul Haq, a tax expert, said bureaucracy bestowed on itself this benefit of reduced rate taxation, blatantly bypassing the Parliament. He said Finance Minister Ishaq Dar despite being aware of it has done nothing against it, which confirms that politicians and bureaucrats work hand in hand to cause the exchequer stupendous loss through SROs. “This SRO is against the spirit of equity because it gives immunity to the higher income people”, a tax official said, adding these officials were getting higher transport allowance and opposing its abolishment. The FBR has already finalised the plan for phasing out discriminatory SROs in three years and some of them would withdrawn in budget 2014-15. Published in Dawn, May 30th, 2014