The Bhutanese Leading the way.
The Department of Revenue and Customs (DRC) is currently in the process of verifying the numbers of vehicles that are in stock as well as for which orders have been placed and are on transit to Bhutan.
This comes after the vehicle dealers collectively wrote to the Ministry of Finance recently after tax changes in vehicles making them cheaper from 1st January 2026 led to mass cancellations, and dealers unable to sell their current stock which has higher tax.
The letter from the vehicle dealers while appreciating the long-term vision behind the rationalization of vehicles taxes say they are currently facing severe challenges as a direct result of the announcement.
It says with the news of the upcoming tax reduction becoming public, customers have started cancelling their bookings and even those who had already been allotted vehicles are now unwilling to take delivery.
‘This sudden shift in consumer behavior has caused significant disruptions to our operations. Additionally, we are holding a large inventory of vehicles and have, in line with our principal distributors’ requirements, already submitted and committed to our sales forecast and vehicle orders for 2025,” says the letter.
It goes on to say that the timing of this announcement has placed them in a difficult financial situation, as they are unable to move current stock and are bound by their forward commitments.
They said their business already greatly suffered due to COVID-19 followed by the import moratorium and they only began their operations in August 2024 and were just beginning to stabilize but the current development now poses a threat to their sustainability.
The dealers proposed three possible support measures. First, is a financial support in the form of a working capital or bridge financing to meet cash flow commitments. Second, is permission to sell the current stock and upcoming 2025 forecasted vehicles under the new lower tax rates to ensure fair marketability and avoid further financial losses, and finally access to Economic Stimulus Plan loans or any relief mechanism that can provide liquidity and breathing space during this transition period.
A vehicle dealer said the government said that it will call the dealers soon with some possible solutions.
A government official said that the DRC is currently looking at the numbers to see the number of unsold cars, and those in stock to get an idea of the scale of the issue. While DRC officials can easily verify those in stock, it is taking some time to verify those in transit that are not yet here.
The official said that the numbers will be looked at, and accordingly recommendations will be made. The official, at the same time, said there will always be some disturbance when there is some policy shift and while vehicle dealers lose out in the short-term, they will eventually gain in the long run as more people can afford to buy cars, and so the future is not bleak.
The Finance Ministry after getting the data is likely to seek legal interpretation on any measures it plans.
At stake are hundreds of unsold vehicles and jobs.
