I n 2010 more than the umbrella Economic Development Policy business houses showed interest in the Fiscal Incentives or tax exemptions that accompanied it. This was rightly so as this was where the main meat and intent of the document lay.
However, four years later it is disappointing to find out that the overwhelming majority of the Nu 6.6 bn incentives from 2010-14 went mainly to a few big and established business houses.
The EDP document pays prodigious lip service to Cottage and Small Industries and small businesses in rural areas but it is precisely these businesses that were left even without the usual peanuts.
Bhutan has around 30,000 business licenses that provide the largest amount of employment outside of agriculture. However, over the years be it in terms of government policy or incentives this section has been ignored the most.
One good move by the current government is in doing away with Business Income Tax for small rural shops that are anyhow not very profitable. But even this total exemption is peanuts compared to what the big boys are getting and will continue to get mostly till 2019.
Even in the Tourism incentives it is interesting to note that a large bulk of the incentives so far has been taken by newly established and high
It is also interesting to note that government ministries and agencies are also some of the major beneficiaries in many areas from health to agriculture underscoring how private enterprise has failed to take off in these areas.
The end result of all these incentives was supposed to be faster economic growth and more job creation but that has not happened. This leads one to question how well spent the fiscal incentives were and if they could have been much better targeted.
The government of the day is reviewing the EDP and while doing so it must make sure that the fruits of the economy are more evenly spread instead of it going to a few.
Trickle-down economics is the greatest broken promise of our lifetime