The Economic and Finance Committee (EFC) of the National Assembly which was tasked with looking after the Tax Bill of Bhutan 2022 has a made a major departure from the government’s tax figures.
The government put a 20% Sales Tax (ST) on imported pork and chicken and all processed products linked to them to help encourage the local poultry and pork industry.
However, the EFC has raised it to 40% ST.
The EFC has then introduced new dairy items like milk and cream which the government had not touched and has proposed a 10% increase in the ST to make it 20% ST.
The EFC has also introduced other new dairy items like butter, cheese and curd and increased the tax from ST 10% to ST 50%.
The EFC also touched on another new area of imported eggs and introduced a 50% ST which was not there before.
When it comes to cement the governmnet had increased the tax by 10% ST to make it 15% ST and the EFC has instead proposed 30% ST.
The EFC has also brought in new items heads under grill, netting and fencing which it has increased the tax by 10% ST.
In terms of furniture the government increased it by 10% ST to 20% ST while the EFC increased it to 50%.
The EFC ironically reduced the 100% ST on tobacco to 50%.
The EFC Chairperson, Kinga Penjor of Gangzur Minjay said the taxes had been changed to benefit the local producers of the items, ensure food security and self sufficency.
However, except for the EFC members the majority of MPs were in favour of the government’s earlier proposal with the Finance Minister and Agriculture Minister also saying the hikes on chicken and pork by the EFC was too much.
A vote will be taken on the issue during discussions.
The NA majority voted to keep the 20% ST on chicken and pork products and not make it 40%. The NA also narrowly voted to not increase the tax on milk and cream.
The NA also voted to not support the EFC’s proposal to increase the ST on dairy items like butter, cheese and curd from ST 10% to ST 50%.
The NA voted to support the EFC proposal to increase the ST on eggs to 50% after the Agriculture Minister said Bhutan has more than enough eggs.
The NA rejected the EFC proposal to decrease the tobacco tax to 50% ST and instead kept it at 100% ST.
The discussions on the remaining taxes on fencing items, cement and furniture will be taken up tomorrow.
The NA voted to increase the ST on cement and brick items to 30% ST up from the government proposal of 10% increase to make it 15%.
The NA rejected increasing the ST on grill and netting and also rejected the EFC proposal to increase the tax on furniture to 50% ST.