The Bhutanese Leading the way.
Though the Goods and Services Tax is yet to be finalized, the Ministry of Finance aims to implement it by July 2025. The Department of Revenue and Customs will start a comprehensive outreach program for businesses and taxpayers. Business units with a turnover of more than 5 million will be automatically registered for the tax.
The Minister of Finance Lyonpo Lekey Dorji says, “To prepare the country for the implementation of GST, the DRC will start a comprehensive outreach program that will enable the businesses and taxpayers to understand the GST law, GST regulations, and the compliance requirements for both DRC and the business units.”
DRC will also initiate training and programs for their officials and also for business communities.
For business units with turnovers of more than 5 million a year, it is important to work on their invoicing systems. It should be capable of complying with the GST law. These business units will be automatically registered for the tax.
Other business units that have a turnover of not less than 2.5 million in the last one year can opt for a voluntary registration.
The original Act had a single GST tax rate of 7% for all goods and services by subsuming the current sales tax.
GST will allow to reform both direct and indirect taxes that people often find burdensome. As a consumption tax, GST will ensure that those who consume goods and services are responsible for paying the associated taxes. It will also avoid double and triple taxation.
It will reduce the tax burden, and at the same time lead to higher tax collection by making it more broad, as it will give incentives to those who register. Past estimates said Nu 3 billion (bn) more can be collected every year using GST.
The Minister said that any additional information on GST will be made available from the DRC, tax payer service unit, DRC media partners, and through the mainstream media.
