The Bhutanese Leading the way.
As of 6th May 2026, the total Goods and Services Tax (GST) collections amount to approximately Nu 3.36 billion (bn) with net GST revenue of approximately Nu 3.17 bn after refunds.
The collections comprise of GST on imports, GST on domestic economic activities, and GST on government services. The vast majority of the GST collection is already done at the entry points for imports. The remaining amount would be domestic filers
The internal target of the Ministry of Finance (MoF) for the GST collection is Nu 6.8 bn for six months from January to June 2026 with an average monthly target of Nu 1.133 bn.
The Nu 3.17 bn figure for 4 months and 6 days should be around Nu 4.758 bn as per the target, which means a shortfall of around Nu 1.588 bn below the internal target.
The GST collection of Nu 3.17 bn is for 4 months and 6 days or 126 days to be exact.
In comparison, the Sales Tax collected for 2024-2025 financial year was Nu 9.603 bn considering that Sales Tax was not imposed on most services and many basic food items, as it is now for GST. The average sales tax collection comes to around Nu 800.25 mn per month.
By contrast, the average monthly GST collection stands at about Nu 755 million (mn), despite GST covering a significantly broader tax base. This means that, on average, monthly GST revenue is lower than the revenue collected under the previous Sales Tax system.
Earlier in March, when the average GST collection for January and February stood at around Nu 665 mn per month, a GST official said that these are typically slower months for tax collection. The official noted that revenues were expected to increase from March through May, when economic activity and imports generally rise.
While the latest figures show some improvement, they do not yet indicate a significant increase in collections.
This leads to the question if the GST system is really worth it given the massive compliance burden for small businesses, tax collection burden for tax officials and complaints of inflation by ordinary people.
Even in neighboring India the data there shows that tax revenue before GST was higher with less compliance burden compared to the post GST period.
The 2026-27 budget shows a target of Nu 14.180 bn GST collection over 12 months which means a monthly average target of Nu 1.181 bn. This will be a tall ask given that the current collection of Nu 755 mn per month average is much below that.
The budget has also set an excise tax collection target of Nu 2.699 bn for 2026-27.
The MoF said monthly GST collections have remained broadly stable, with gradual improvement in domestic GST reporting and reconciliation.
The ministry said it would also like to clarify that GST collection figures are subject to ongoing reconciliation, filing adjustments, and refund processing, which are normal features of a GST system.
As of 4th May 2026 more than 4,300 taxpayers have been registered under the GST system.
This includes compulsory registrants, voluntary registrants, and government agencies making taxable supplies.
The MoF said the GST filing compliance rates remain encouraging for an initial implementation phase.
Monthly filing compliance currently stands at approximately 88.5 percent and quarterly filing compliance stands at approximately 86.8 percent.
The MoF said it is continuing taxpayer education, technical support, and compliance follow-up measures to further improve filing rates and facilitate smoother implementation.
The MoF said it would like to inform the public that the implementation of the GST system is progressing steadily and showing encouraging signs of stabilization. Taxpayer registration, filing compliance, revenue collection, and refund processing continue to improve as businesses and institutions gradually adapt to the new tax system.
It said the GST reform is a major structural transition for the economy and, as experienced internationally, initial implementation periods typically involve system adjustments, taxpayer familiarization, and phased compliance improvements.
The ministry said it appreciates the continued cooperation and support of taxpayers, businesses, and the general public during this transition period.
The GST system includes mechanisms for refund processing, particularly for eligible businesses and taxpayers with excess input tax credits.
As of 6th May 2026, GST refunds amount to approximately Nu 195 mn. The processing of legitimate refund claims is an important feature of a modern GST system and supports business cash flow and economic activity.
The MoF said that direct comparisons between the previous sales tax regime and the current GST system should be interpreted cautiously, as GST represents a fundamentally different tax structure with broader coverage, input tax credits, and integrated compliance mechanisms.
It also noted that the current revenue trends indicate that the GST and Excise Tax system is functioning effectively and contributing positively to domestic revenue mobilization during the transition phase.
The MoF said it remains committed to ensuring smooth implementation of GST, continuous system improvement, taxpayer facilitation and transparent public communication.
