During Friday’s Question Hour, the MP from Wamrong asked the Finance Minister when a new Pay Commission would be formed to revise public servants’ salaries. Finance Minister Lekey Dorji responded that every government since 2008 has established one, and the current government will do so when conditions are appropriate.
He noted that despite severe financial pressure during the Covid-19 period, the previous government granted a major salary hike of over 50%, largely enabled by His Majesty’s generous USD 100 million support from bitcoin proceeds. This increase added Nu. 6.8 billion in annual expenses. Lyonpo explained that the financial situation has improved: major bonds and Treasury Bills worth Nu. 39 billion have been cleared, reserves have risen from USD 596 million in early 2024 to over USD 1,038 million, and Punatsangchhu-II is now operational.
Significant tax reforms effective 1 January 2026 aim to boost disposable income through reduced PIT rates, lower corporate tax, merged business income tax, and various exemptions. However, these measures will reduce government revenue while expenditure pressures—such as infrastructure demands and loan repayments—continue to grow.
Lyonpo said salary revisions must consider inflation, private-sector impacts, and fiscal sustainability, adding that the government will establish a Pay Commission as soon as economic conditions permit.