The Bhutanese Leading the way.
Finance Minister Lekey Dorji said the ministry welcomed informed public discussion on the implementation of the Goods and Services Tax (GST).
“As with any major structural reform, the Government remains committed to transparency, accountability and continuous improvement while ensuring that the reform is assessed objectively and against its intended long-term outcomes,” said Lyonpo.
He said it is important to distinguish between GST and the Bhutan Integrated Taxation System (BITS).
GST is a structural reform of Bhutan’s indirect tax system designed to modernize the country’s tax framework. BITS, on the other hand, is the Government’s integrated digital tax administration platform that supports the administration of multiple taxes, including Personal Income Tax, Corporate Income Tax and GST.
BITS replaces the legacy Revenue Administration Management Information System (RAMIS), which has reached the end of its operational life, and provides the digital foundation for taxpayer registration, return filing, payment processing, compliance management, audit, data analytics and future tax administration reforms.
Lyonpo said it would not be accurate to characterize the Government’s investment in BITS as expenditure on a “GST system” alone. BITS is a national digital public infrastructure serving Bhutan’s entire tax administration, of which GST is one important component
The total investment in BITS, including the core digital platform and supporting infrastructure, is ppl approximately Nu.1.0 billion, with a further Nu.100 million invested in capacity building, taxpayer outreach and temporary implementation support. These investments have been undertaken through approved Government budgets and authorized staffing arrangements as part of the Government’s long-term programme to modernize tax administration and improve public service delivery.
Lyonpo said that to place this investment in perspective, the Department of Revenue and Customs collected Nu.53 billion in tax revenue during FY 2025–26. The total investment in BITS therefore represents approximately 2% of one year’s tax revenue, while establishing the digital infrastructure that will underpin Bhutan’s tax administration for many years to come.
“Like other strategic public digital infrastructure, the value of BITS should be assessed not only by its implementation cost but by the long-term improvements it delivers in efficiency, transparency, taxpayer services and revenue administration.”
Lyonpo said although GST has been operational for only a short period, the implementation has already delivered important modernization outcomes.
More than 4,570 taxpayers have been successfully migrated to the BITS platform, compared to approximately 2,800 taxpayers at the initial rollout.
MoF is on track to migrate another 200,000 taxpayers (mostly PIT) from RAMIS to BITS.
100% of GST returns are now filed electronically through the BITS portal.
BITS enables 100% electronic tax payments through its integration with the Bhutan Integrated Revenue Management System (BIRMS), while continuing to accommodate cheque payments where necessary.
GST registration can be completed in approximately five minutes, provided the required information and records are in order.
GST return filing has been fully digitized, eliminating manual submission and processing.
Lyonpo said these outcomes demonstrate that BITS is already improving taxpayer convenience, service delivery and administrative efficiency while providing the technological foundation for future tax modernization initiatives.
“The Ministry also recognizes that GST remains in its early stages of implementation. As observed internationally, structural tax reforms require a period of adjustment as businesses, taxpayers and tax administrations adapt to new systems and processes. The Government is actively engaging with businesses and other stakeholders to simplify compliance requirements, strengthen taxpayer support and refine system performance wherever improvements are warranted,” said Lyonpo.
He said the government does not assess the success of GST solely on short-term revenue collections. Consistent with international best practice, the reform is being evaluated against a broader set of performance indicators, including: taxpayer registration and participation; filing and compliance rates; digital service delivery and taxpayer convenience; improvements in administrative efficiency; reduction in manual processes; transparency and quality of tax information; strengthened compliance and audit capability; and long-term revenue sustainability.
Lyonpo said revenue performance remains an important indicator, but it is one of several measures used to assess the effectiveness of a structural tax reform.
He said the ministry values the important role played by the media, businesses and the public in strengthening public policy through informed dialogue and constructive scrutiny. Equally, major structural reforms are best evaluated through objective, evidence-based and balanced assessment that considers both implementation challenges and the longer-term outcomes they are intended to achieve.
“The policy question at this stage is therefore not whether Bhutan should abandon a structural reform during its implementation phase, but how the Government, taxpayers and all stakeholders can work together to ensure that the reform delivers its intended long-term benefits for the nation.”
He said the ministry remains committed to continuously strengthening both GST and the Bhutan Integrated Taxation System to build a modern, transparent and efficient tax administration that improves taxpayer services, supports economic growth and safeguards Bhutan’s long-term domestic revenue base.
