Department of Revenue and Customs, Thimphu

BIT and CIT payment to be extended as Contingency Plan is underway

The state of the industries impacted by COVID-19 has escalated to the point where employers are laying off their staff either unpaid or on half-paid leave.

The Prime Minister, at the meet-the-press held yesterday, said that the government has been informed of such affected industries. PM explained the scenario from the labour ministry’s point of view. While highlighting the existing unemployment problem in the country, he said that laying off employees and sending employees out on unpaid leave would further worsen the matter. “Please try not to do that,” PM stated on the matter.

He said the employees are there during the times when the business does well and so they should not be abandoned with troubled times.

He said if such layoffs kept happening then around 12,000 of them would require government help.

PM assured that with Contingency Plan or the Economic Stimulus Plan (ESP) at hand, the government will help to fill in the earning gaps, so much so that the hotel owners need not have to resort to laying off their employees.

The Bhutanese interviewed a few of the affected employees that worked in hotels in Wangdi, Thimphu and Paro.

All of them said they are having a hard time paying house rent and buying essential household items with just half of their basic pay. Most of them recall making extra money through service charges or tips generated through guests, mainly tourists.

One of the employees stated, “I have a family, two kids and my rent is Nu 8,500. What can I do with Nu 3,500? I am worried for how long this is going to carry on.”

Another hotel employee from Thimphu who had left her village stated that she is on unpaid leave now. She barely managed to make her way back home and had to borrow her travelling expense from a friend.

Meanwhile, an employee from another hotel said that about 200 employees are currently working but are being paid half the pay.

When asked if the government can intervene on behalf of the public on possible rent waivers from landlords, the PM, in his reply, stated that this was not in their hands as landlords too have their own burden like loans and that it would be a double-edged situation to do so. However, the PM said that if landlords take this initiative by themselves, the government would be happier than anyone else.

Given the dreary economy prospects caused by COVID-19 worldwide, the PM also confirmed that the date for Business Income tax (BIT) and Corporate Income tax (CIT) has been extended by a few months.

On hearing the news of a possible economic bailout, some of the hoteliers stated that they are thankful to the government, and felt it will especially help small businesses and others relying on rolling capital for their businesses.

Chimi Wangmo of Yeti Handicraft said, “Since 10 March, we have not seen any customers. The tourists being barred due to the situation has led to that, and local consumers normally don’t come to buy handicrafts since the items are local. We are thankful to the government for taking such initiatives to help the people. We want to convey that we empathize with the situation and will cooperate with the government’s decisions. We have 4 employees at the shop and we are continuing regular salaries for them- I feel that in such times, employers have to think about the hardships they had put into work when the times were favorable, and now is our time to step up for them.”

While answering to another question regarding the fiscal and monetary measures, PM said that it would not be a hassle for the government to get it approved, as there is a joint committee of the Parliament offering to help when required, as there is a provision for emergency sitting. He said that the Economic Stimulus Plan is aimed at helping different sectors and will be revealed in the upcoming weeks.

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