The Bhutanese Leading the way.
A recent Royal Audit Authority performance audit on Business Income Tax from 2009-13 had pointed out that the overwhelming benefit of Nu 2.688 bn fiscal incentives given from 2010 onwards as part of the Economic Development Policy had mainly benefited 39 high end hotels.
It had noted that apart from that the spread was mainly in Thimphu and Paro lacking region balance as well.
This was contrary to the purpose of the incentives to stimulate private sector growth especially among the medium and cottage industries.
In response to a question by The Bhutanese at the meet the press the Finance Minister Lyonpo Namgay Dorji agreed that a bulk of the incentives went to the 39 high end hotels.
He said this indicates that the fiscal incentives did not cover and meet its required beneficiaries especially in the cottage and small industries.
“The government will take note of how the incentives have not benefitted others and further see to it that new incentives are rationalized to benefit more businesses,” he said.
The fiscal incentives which were decided in 2010 ran its course and expired in 2015 December.
The Finance Minister said that the revised EDP is currently being reviewed by the Ministry of Economic Affairs and once the cabinet decides then the government will also review the new fiscal incentives.
Lyonpo at the same time said the problem is also related to the fact that there is not much investment in cottage and small industries and so since many don’t turn up for such businesses then they don’t get the incentives.
He said that the government while reviewing the EDP would also see whether and to what extent the past incentives had benefitted the private sector.
