The government is in the process of drafting an E-commerce policy that will allow online business or online shopping if done legally. The issue was discussed in the National Assembly (NA) after the Kilkhorthang Mendrelgang MP Bimal Thapa raised his concern over the matter.
He said that online shopping and other business, like Airbnb, are popular in Bhutan and since such businesses are illegal, it has greatly hampered the legal business firms, and also affected the tax system in the country.
In connection to this, he asked the Economic Affairs Minister on what the ministry is doing to monitor tax system on such businesses, and also regarding the plans and measures to make such businesses legal.
To this, Lyonpo Loknath Sharma said that Airbnb is an important part of the e-commerce ecosystem and provides new business opportunities to the citizens. He said that it lowers the barriers to entry into business and allows the people to be part of the global e-commerce value chain.
He said, “This is part of global digital economy and banning or stopping is unfair for many of our citizens who make a living out of this. As the government, we need to ensure that these businesses operate legally, by obtaining licenses, and we need to have oversight to ensure public safety and customers are being fairly treated with the required services.”
The ministry and TCB met a few times to discuss the way forward and based on the joint consultation, he said, that the ministry notified all operating Airbnb rentals to obtain a license as per regulations for commercial establishments.
Lyonpo, in addition, said that there cannot be an exception to the emergence of the digital economy, and besides the e-commerce guidelines, the ministry is in the final stage of drafting the e-commerce policy to provide a strategic way forward for the development of the e-commerce ecosystem in the country.
“We agree that we must look into viable mechanism to monitor and ensure that tax revenue is collected from online transaction, and the current GST Bill under deliberation brings online transactions under the GST ambit,” Lyonpo added.
Meanwhile, he said that till date, more than 31 e-commerce licenses have been issued following adoption of e-commerce guidelines during BEFIT program in July 2019. Licenses have been issued after completing endorsement registration in RMA payment gateaway system to ensure that transactions are fully captured, both for foreign exchange and tax recording purposes.
He said, “Department of Trade is working closely with Department of Revenue and Customs on illegal operation of e-commerce business and have jointly apprehended a few individuals in November 2019.”
He said that all the e-commerce entities are required to comply with the existing rules and regulations, including the Consumer Protection Act 2012, and rules thereto for any disputes, payments, advertisement, and misrepresentation of facts and figures, safety standards related to e-commerce transaction.
Meanwhile, the ministry is finalizing the e-commerce policy to be submitted to GNHC and the Cabinet for endorsement.