As per a Ministry of Finance compilation of Fiscal Incentives (FI) in the Hotel Sector, Nu 286 mn was given as incentives for Sales Tax (ST) and Customs Duty(CD) exemption to hotels from 2008 to 2018.
Of this the top five companies that are beneficiaries are Bhutan Hotels Pvt Limited that owns Le Meridien Thimphu with Nu 80 mn, Bhutan Ventures Hospitality that owns the Sixth Sense hotels at Nu 25.44 mn, Manidheepa-Mohsin Hotels and Resort at Nu 24.45 mn, Himalayan Safaris Lodges Pvt Ltd at 16.91 mn and Bhutan Eco Ventures with Nu 9.98 mn.
The MoF compilation has come up with additional figures in the Hotels ST and CD exemption, showing how of this 10 year fiscal incentives, the 17th May 2013 to 31st December 2015 additional incentives of Nu 113.97 mn benefited Le Meridien in Thimphu the most out of 126 hotels.
The MoF figure shows that from Nu 80.09 mn in the last 10 years for Le Meridien (Thimphu) the May 2013 to December 2015 incentive led to Nu 60.71 mn in benefits which is 53.26 percent of the total Nu 113.97 mn exemption for this period for 126 hotels.
However, in the case of other hotels this two-year incentive did not bring them as much benefit in the same period with, for example, Bhutan Ventures getting 4.91 mn out of the total Nu 25.44 mn, Manidheepa-Mohsin Hotels and Resort getting 7.30 mn out of Nu 24.45 mn, Himalayan Safaris Lodges Pvt Ltd getting Nu 7.50 mn out of 16.91 mn and Bhutan Eco Adventures which did not get any tax break during this period.
A 25th January 2018 letter from the cabinet to the Anti Corruption Commission had alleged policy corruption and conflict of interest by the former minister and current South Thimphu MP Yeshey Zimba whose daughter is a co-owner and partner in the Le Meridien Hotel.
The letter had alleged that Yeshey Zimba had chaired the cabinet meeting three days before the government dissolved and passed this May 2013 to December 2015 incentive that narrowly targeted the Le Meridien’s active construction stage and timeline to give it maximum benefit compared to all other Hotels.
Yeshey Zimba and DPT have so far denied any wrong doing alleging that the complaint was politically motivated and that it was not additional FI but resolution of certain anomalies in the 2010 FI.
In terms of Income Tax breaks from 2008 to 2018 of the total Nu 121 mn the top five are Taj Tashi at Nu 71.54 mn, Amankora Punakha at Nu 9.99 mn, Hotel Migmar at Nu 8.25 mn, Tashi Namgay and Tenziling resort resort at Nu 5.93 mn each.
There was a total FI of Nu 447 mn in hotels from 2008 to 2018 which include ST, CD and Income Tax exemptions.
The compilation along with FI in other sectors will be uploaded on the Ministry of Finance website after the Opposition party asked for the complete list of all FIs given (see main story on pg 1 for all other FIs).