The Bhutanese Leading the way.
While the civil servants have to patiently wait for their quotas before buying vehicles, some Members of Parliament (MPs) have already gone ahead and imported their Toyota Prados on quota, even without the Ministry of Finance (MoF) issuing vehicle quotas for MPs as yet.
The MoF has not issued vehicle quotas as the Parliamentary Entitlement (Amendment) Bill of Bhutan 2014, passed in December 2014, by the Parliament has not yet received Royal assent. The Bill was only sent for assent in December 2014 after the Parliament closed its winter session.
Three MPs who are already in possession of the Prados are PDP MP Lekey Dorji from Bardo-Trong, DPT MP Dupthob from Others who have recently ordered their Prados, but have yet to receive them are Deputy Speaker Chimi Dorji from Lingmukha-Toedwang of the PDP, Wangdi Norbu from Bartsham-Shongphu of DPT, Khandu Wangchuk from Lamgong-Wangchang of DPT, Kinga Tshering from North Thimphu of DPT, and eminent NC member Dasho Karma Yezer Raydi. There have also been informal enquiries with vehicle dealers by more MPs.
The State Trade Corporation of Bhutan Limited (STCBL), the Toyota dealer in the country, has already ordered around 30 Prados from the Toyota company, based on orders and ‘interest’ shown by various MPs. On the request of MPs, STCBL has managed to get an additional 2.18% discount for MPs from Toyota for ordering a minimum of 30 Prados. The rush of interest from MPs is also to take advantage of the currently low rate of the Japanese Yen.
MP’s already get full custom duties and sales tax exemption with their quota and have to only pay the 25% green tax. MPs have also been given Nu 1 mn as entitlement from the state to buy a car. In contrast, an ordinary citizen would have to pay around 125% in total taxes for a Prado.
The Prado VX 10 model, ordered by most MPs, currently costs around Nu 3 mn without taxes or discount and Nu 3.6 mn with a 25% green tax. For ordinary citizens it would cost around Nu 6.6 mn with 125% taxes.
As per Section 1 of Article 13 of the Constitution “a Bill passed by Parliament shall come into force upon Assent of the Druk Gyalpo”. This essentially means that without Royal assent, the Parliamentary Entitlement (Amendment) Bill still remains a Bill.
Though not used, so far, Section 10 of Article 13 of the Constitution states, “Where the Druk Gyalpo does not grant Assent to the Bill, He shall return the Bill with amendments or objections to deliberate and vote on the Bill in a joint sitting”.
This practice is in line with Constitutional prerogatives given to heads of states in democracies around the world, where either the King or the President can send back a Bill with advice or recommendations to the Parliament for reconsideration. The Parliament has to then have a joint sitting and vote on the Bill again.
Here the MPs, in absence of the Royal Assent, have also not considered the above Constitutional provision, whereby Bills can come back to them with advice for re-deliberation.
This paper has also found that the Department of Revenue and Customs (DRC) and the Road Safety and Transport Authority (RSTA) has also made special exceptions for the MPs.
The DRC which normally does not allow for import of individual tax free vehicles without quotas has allowed the three MPs to sign an ‘undertaking’ that they will produce their quota in the ‘future’.
The Director, DRC, Yonten Namgay said, “We have temporarily signed an undertaking with the MPs allowing them to import the vehicles without paying tax (Custom Duty and Sales Tax) with the understanding that they will show the quota once it is issued.”
The Director said that the MPs had said that the approval for quotas would be coming soon. He also said that the DRC has the authority to give written undertakings up to a month delaying tax payments in certain cases.
A government official, on the condition of anonymity, said that this kind of undertaking was usually given for vehicle dealers who imported vehicles in large numbers and sought such undertakings until the clients picked up the vehicles from the showroom or storage. He said that it is interesting to see such a facility being given for individual vehicles as a temporary quota.
The normal practice is that MPs or civil servants can order and buy quota vehicles only after getting the quota letter from the MoF. The quota letter also doubles up as a tax free import authorization. Once the vehicle arrives in Bhutan at customs, the vehicle dealer shows a copy of the quota to the customs only after which a tax exemption certificate is issued by DRC. Then only can a client finally pick up the vehicle from the showroom.
The RSTA, in its list of documentary requirements for vehicle registration, has specified a quota letter for quota vehicles and a tax clearance certificate. But even though the MPs did not have those documents, the RSTA after an internal meeting on the issue and in consultation with its Director made an exception and got the vehicles registered.
When contacted, the Finance Minister, Lyonpo Namgay Dorji said, “If such imports have happened then it is not only incorrect but it is also unlawful. Those MPs should have waited for the due process.”
Lyonpo said that the Ministry of Finance has not issued the vehicle quota for MPs as the Parliamentary Entitlement (Amendment) Bill of Bhutan 2014 has not yet received Royal assent.
Lyonpo said, “As the elected representatives of people, I think MPs are role models and anything they do has to be in line with policies and laws.”
Meanwhile, this paper got in touch with all three MPs who have all confirmed that they had imported and registered their Prados.
MP Dupthob said that he had ordered for his Prado around six months ago, as the information then was that MPs would be getting a tax free vehicle quota as in the previous Parliament. He said that he had placed the order as STCBL takes around five to six months to get the vehicle delivered.
“However, the Parliament decided to amend the Parliamentary Entitlement Act as the 2008 Act only mentioned exemption custom duties and there was no mention of green tax,” said MP Dupthob.
He said that the discussions and legislation took a long time and by the time STCBL had started coming after him to take over the vehicle he had ordered earlier.
The MP said that he talked to DRC, and as an interim measure, he signed an undertaking to produce the quota later after which his Prado was exempted from Custom Duty and Sales Tax.
The MP said that the next problem was with RSTA as it was compulsory to register any vehicle within 14 days, and he did not have some of the required documents. He said he again requested the RSTA, which after a long meeting agreed to get his Prado registered. He said the only other alternative would have been to not register his vehicle which would have created a different problem for RSTA.
He said that he required the Prado urgently for constituency visits as he did not have such a vehicle. The MP also said that he had already deposited Nu 500,000 with STCBL and was in danger for losing half the amount if he did not take the car.
NC MP Tharchen said that he had also signed an undertaking with the DRC and registered his vehicle with RSTA. MP Tharchen said, “We need to remember that even though the new Bill has not been given assent yet, the existing Entitlement Act is still valid which allows for MPs to import quota vehicles.”
This was also the argument echoed by another MP who did not want to be identified.
However, when asked about this clause, Finance Minister, Lyonpo Namgay Dorji pointed out that the 2008 Entitlement Act exempted only Custom Duties and so any MP using this old un-amended section may have to end up paying sales tax. Lyonpo said that was why the amendment was brought in.
MP Lekey Dorji, while admitting to signing a DRC undertaking and registering his vehicle RSTA, declined to comment on the issue.
