MoICE Minister Karma Dorji (Left) & Finance Minister Namgay Tshering (Right)

MoICE and MoF Ministers explains decrease in the SDF and status of the tourism industry

During the NA Session on 3 October, the Member of Parliament from  Dramedtse-Ngatshang Constituency, Ugyen Wangdi, raised concerns about the government’s revised tourism tax, citing potential legal complications and confusion in the industry.

In response, the Minister of the Ministry of Industry, Commerce, and Employment (MoICE), Karma Dorji, reiterated the government’s commitment to Bhutan’s Tourism Policy 2021 and he emphasized on the Department of Tourism’s authority to adjust fees as and when the market condition dictates.

Lyonpo  Karma Dorji pointed out that the Tourism Policy of Bhutan 2021 states that the number of visitors visiting Bhutan has to be at least USD 200. However, he asserted that no one has the authority to increase the cost if it is not specified in the policy.

According to Section 9 of the Tourism Policy of Bhutan, the Department of Tourism (DoT) has the authority to reduce the price. In that regard, there is a decrease in the Sustainable Development Fee (SDF) currently, given the market situation.

According to the MoICE Minister, the SDF for visitors from India is INR 1,200 but due to the positive bilateral relations, it is not listed in the policy.

The Finance Minister Namgay Tshering said that in a bid to harness the economic potential of the tourism sector, the government unveiled a comprehensive set of measures, significantly revising its Tourism Levy Act of 2022. Recognising the vital role played by tourism in generating employment, foreign exchange earnings, and overall economic growth, the government has introduced a series of incentives designed to attract tourists and boost the country’s economy.

The House was also given a report on the current status of the tourism industry in Bhutan, and he stated that effective from 1 June 2023, the government introduced three SDF incentives. Tourists paying for four nights could extend their stay with an additional four nights for free at a cost of USD 800. Similarly, the 7+7 plan offers 14 nights for the price of 7 at USD 1,400, and the 12+18 plan grants 30 nights for the price of 12 at USD 2,400, presenting substantial savings for travellers.

To further entice tourists, the government announced a 50 percent reduction in the daily SDF by bringing it down from USD 200 to USD 100 per person per night, effective from August 2023 until September 2027. Children between 6 and 12 years old, visiting as tourists, will benefit from a 50 percent reduction as well, resulting in an effective SDF of USD 50 per person per night. Children below six years of age can visit Bhutan without incurring any SDF charges.

Additionally, the government implemented a 24-hour SDF exemption for tourists in the border towns of Samtse, Phuentsholing, Gelephu, and Samdrup Jongkhar, starting from 14 April 2023, for a duration of one year.This strategic move aims to revitalize economic activity in these border towns and boost the tourism and hospitality sectors.

To enhance the overall tourist experience, the government revisited entry fees at monuments and lifted entry restrictions on six auspicious days, encouraging tourism. DoT collaborated with local groups to improve facilities for tourists, outsourcing the management of tourist guides at key terminals and restroom facilities along popular routes to local youth groups. Initiatives like the Taktsang Service Management Group was the government’s effort to engaging local communities in enhancing services and preserving natural sites.

The minister said these reforms are part of Bhutan’s commitment to high-value, low-volume tourism, solidifying its position as a best destination for global travellers. With these initiatives in place, Bhutan anticipates a substantial increase in tourists, indicating a new era of economic growth and sustainable development.

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