The Bhutanese Leading the way.
Importers have expressed confusion over the excise tax regime, particularly regarding the requirement for import permits and the permit fees levied on excisable goods at the point of entry.
Phuntsho, an importer sourcing goods from Bangkok, said she was taken aback by the additional charges imposed during the import process.
“I was very shocked when I got a call saying that I had to pay almost Nu 300,000 as permit fees when I imported this consignment. I did not know we had to pay permit fees and that we even needed a permit. If we had heard this from last year, before the tax regime was implemented, we could have been prepared and would not have been as shocked,” she said.
Sources indicated that Phuntsho was not alone in her experience, noting that other importers were also unaware of the requirement for import permits and the associated fees. According to the sources, several importers only became aware of the permit requirement when they were asked to make payments at the entry point.
A wholesaler echoed similar concerns, saying that better understanding of the tax system was necessary for businesses. The wholesaler said they had contacted the customs office to seek clarification on why products such as Nescafé latte cans and bubble tea were charged excise tax, despite not being aerated beverages. According to the wholesaler, the person on the phone responded by saying that they would not understand taxes.
“If the firsthand taxpayers do not even understand the tax regime, how are we supposed to calculate our taxes?” the wholesaler said.
In response to the concerns, the Department of Revenue and Customs (DRC) explained the rationale behind the requirement for import permits and permit fees for excisable goods. According to the DRC, excisable goods warrant a mandatory import permit regime because they are goods with inherent revenue, health, social and regulatory sensitivities. Unlike ordinary imports, excisable goods such as alcohol, tobacco, fuel, aerated water and pan masala have direct externalities that require pre-entry oversight by the State.
DRC also said that they had included and presented on the permit and permit fees during their advocacy workshop for GST.
The DRC stated that an import permit functions as a prior regulatory control, enabling the government to track the importer, quantity and compliance history before the goods enter the country. This, it said, is critical for excisable goods, where post-import enforcement alone is insufficient to prevent leakages, diversion, hoarding or illicit trade.
The department further explained that the permit mechanism also serves as a revenue protection tool, as excisable goods carry a high tax incidence and are vulnerable to under-declaration, misclassification and abuse of exemptions. Requiring a permit allows authorities to align import quantities with declared capacity, licensing status and historical consumption, thereby strengthening risk-based controls and audit trails.
According to the DRC, permit fees are justified as a cost-recovery and regulatory service charge. Processing permits involves administrative verification, risk assessment, coordination with customs and monitoring of compliance. The fees are intended to offset the regulatory costs incurred by the State and to discourage speculative or excessive permit applications.
The DRC also said that excisable goods often carry public health and social implications. The import permit system allows the government to manage availability, prevent market distortion and support broader public policy objectives such as consumption control, safety standards and responsible trade practices.
In addition, the DRC stated that the permit regime ensures traceability and accountability across the supply chain by creating a documented link between import authorization, customs clearance, excise assessment and downstream distribution. This, it said, is essential for effective enforcement under a modern excise and GST framework.
According to the DRC, import permits and permit fees for excisable goods are not revenue instruments alone, but integral regulatory mechanisms aimed at safeguarding revenue, upholding public policy objectives and ensuring disciplined and accountable trade in sensitive goods.
