Mixed reviews on the Tax Bill from citizens and businesses

Much buzz has been generated among the consumers with the introduction of the new Tax Bill. There are some that are relieved that taxes on essential good have actually reduced.

The local industries are hopeful for a chance in the market for their products with the new Tax Bill. The President of Association of Wood Based Industries, Phuntsho Wangdi, cited the merits of the tax increase.

“The local manufacturers will be benefited. Till now, people have been depending on imported products, and we also requested the Ministry of Economic Affairs and Ministry of Finance for restrictions and bans on imports to support local products. This increase in tax will be welcomed as there are enough resources for the local manufacturers to produce products and showcase their potentials.”

Sonam Zangmo is the founder of Finn, and Yangchen Dema of Tara Noodles, both producing noodles shared similar hopeful opinions on the increase of tax levied. They said it is good news for local and indigenous products to find the market.

“With the imported goods becoming more expensive, our local products will flourish in the market,” they said.

On the other hand, the hotels and restaurants are going to face a hard time. According to the Chairman to the Hotel and Restaurant Association of Bhutan, Sonam Maekay Penjor, it is not a welcomed choice.

“Yes, we have challenges with our Dollars and INR reserves but that does not mean we go into taxing, banning and curtailing businesses. Even for our guests, choices will be limited and expensive,” he said and further added, “It’s not an ideal situation for tourists and hotels to be in, especially after the pandemic and with the global economy in a slump. We instead need injections of fund and liberal fiscal measures to boost the economy and stimulate business instead of taxation.”

Although there is tax levied on import of plastics, an official from Clean Bhutan suggests that plastic waste will not decrease.

“The plastic will not decrease even with increase in tax levied. Most plastic wastes are from junk foods and a 10 percent increase won’t amount in too much. Even during the pandemic, plastic waste was very high, so I don’t think there will be a decrease in the plastic waste,” said the official. 

According to the President of the Bhutan Chamber of Commerce and Industry (BCCI), Tandy Wangchuk, “Depending on the economy, the government also has to increase the tax, so we support the tax revision, the initiative for increase in tax for imported goods is welcomed. The local products can be boosted, and they will have a better platform.”

“However, we wish that the government could address economy related issues, not just import driven economy. We hope for a balance in the economy, but the economy is not doing good right now. The government also depends on the tax, but with access to finance frozen, there won’t be much business operating and tax payers,” he added.

Talking to an official from the Bhutan Hyundai Motors, “The increase on tax is levied on different models of automobiles, so I believe people will go for automobiles that do not have tax increased. The sales for particular automobiles with the increased tax will go down.”

Consumers on public forums, such as Facebook, have started discussing their opinions on the Tax Bill, which are mostly negative. They raised issues on how the increase of tax on imported goods will eventually affect the low-income group, and they also shared their concerns on rise of smuggling goods.

Talking to a consumer, Tika Ram, he shared that the imposed tax does not feel like a wise decision. “The pandemic has affected the livelihood of the people, and now, with the tax increase, commodities will be very expensive. People in the border areas will go to India to buy the commodities and depending on the income level of people, their lives will be greatly affected.”

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