From Left to Right: DNT’s Party Manager Phurba , General Secretary Tenzin Lekphell and President Dr Tandin Dorji outside the high court

DNT sues govt on tax case

More than Nu 6 bn in Fiscal Incentives since 2010 may be at stake

The Druk Nyamrup Tshogpa party has filed a case in the high court against the PDP government on tax alteration via Fiscal Incentives which it deems to be unconstitutional.

The DNT said that after careful consideration and comprehensive consultation, in line with the due process of law, DNT is taking this correction step to request the court to rule on the illegal and unconstitutional implementation of the tax alteration.

DNT has appealed to the High court mainly for two reasons, says DNT General Secretary, Tenzin Lekphell.

He stated that the present government has violated the constitution and other laws like public finance act 2012 by giving tax holidays to some institutions and business bodies without following the due processes of the law of the country. “Any individual or institution must abide by the law and if one has violated or breached the law the only place to seek justice is in the court,” he said.

Further, he added that Constitution is the prime pillar and all Bhutanese citizens have the responsibility to protect and uphold the sacred document.  “Governments will come and go after every five years but this mother law must remain sacred to guide the country and to guide all of us. And when in power, we the people of Bhutan cannot allow them to twist and play it,” he said.

A DNT release says that in attempting to justify their erroneous action, the Prime Minister has ‘misled the nation’ by misinterpreting several legal clauses including the ruling of the Supreme Court. It say this is not only wrong, but a serious breach of trust that was bestowed upon him by the people of Bhutan.

“As a registered political party, it is our sacred duty to protect the constitution. Any violation error or ignorance of this scared document must be pointed out and corrected,” says the release.

DNT said it is not seeking political mileage but rather it is duty bound to protect and uphold the constitution. It says DNT is singularly focused on correcting the violation of the constitution for the future of Bhutan rather than punishing the violator.

“As we have said from the beginning, this it is not about DNT vs PDP, Government vs Opposition, or NA vs NC, but about protecting the constitution and ensuring that our supreme law is not violated,” stated the release.

DNT also stated that they are not concerned about winning or losing the case, but are determined to protect the law on behalf of present and future generations of Bhutanese.

The release says protecting the constitution is the responsibility of every citizen and so any violation or ignorance or error must be pointed out and corrected.

DNT said they have immense trust in Judiciary to use their wisdom and bring corrective measures to this violation.

DNT’s move comes on the back of the cabinet recently requesting the Speaker as per Parliamentary protocol to seek the Supreme Court’s interpretation on fiscal incentives granted prior to 8th of May 2017.

The High Court’s decision would have an impact on more than Nu 6 bn in various fiscal incentives granted all the way from 2010 onwards. If the court rules that all FI is illegal than businesses may have to end up paying around Nu 6 bn back to the government starting from 2010. This in turn would have a crippling impact on a sector trying to adjust to India’s GST regime.

The government until recently said that their incentives was legal in their interpretation of the 2011 constitutional tax case judgment. The whole issue cropped up earlier this year when the National Assembly Finance Committee first brought up the issue which was then taken up by the Speaker and the Opposition with even the National Council rejecting the FI Bill.

One fear is that questioning the current Fiscal Incentives prior to 8th May could very well open a Pandora’s box going all the way to the 2010 incentives as they all fall under the same legal principles.

A legal expert that the paper talked to said that the best place to solve the issue had been in the Parliament as all sides were involved in this from 2010-11 but their inability to do so means that case could go in any direction.

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