The Bhutanese Leading the way.
The exemption ended on 31st March and businesses in rural areas are required to pay BIT
13,516 out of 16,355 Business Income Tax (BIT) units that were exempted from BIT in the previous year have filed their return for income year (IY) 2025 as of 29th April, which means 82.6 percent have filed their taxes.
Small and micro businesses in rural areas of Bhutan had been exempt from paying BIT to support local economies, with the Ministry of Finance (MoF) extending the exemption until 31st December 2024. The Department of Revenue and Customs (DRC) had issued a notification formalizing the extension.
The exemption was introduced as part of the government’s broader COVID-19 economic response to cushion the impact of the pandemic on small and micro businesses, particularly in rural areas. Many of these businesses, including small retail shops and family-run enterprises, were affected by supply chain disruptions, reduced customer flow, and limited access to financial support.
The measure was also aimed at supporting rural livelihoods, reducing income disparities, and encouraging economic activity outside urban centres. More than 12,000 businesses across the country benefitted from the initiative, with the government foregoing over Nu 32 million in revenue during the exemption period.
The tax relief applied specifically to businesses operating outside thromdes, targeting rural economies, while certain sectors were excluded from the exemption.
