NA keeps vehicle taxes at 100% for small vehicles while NC opposes high taxes

The National Assembly decided to marginally bring down tax for all vehicles with 1500 cc or below to 100% from the 110% proposed by the government but the tax for all other vehicles remains as proposed by the government.

Meanwhile the National Council decided to not support the governments Tax Bill objecting to the five percent fuel tax on the grounds that it would fuel inflation and also that the extremely high tax for small vehicles would make them unaffordable. They also called for electric cars to be taxed while reducing taxation for public transport vehicles. NC members also questioned the logic of promoting electric cars through taxes given that Bhutan’s roads were not in a good condition and adequate infrastructure was missing.

The majority of MP’s at the NA supported a government’s proposal of high tax revisions but some also expressed some qualitative reservations.

South Thimphu, MP, Yeshey Zimba said, “Tax is one of the most important sources of income of the government. Taxation should be levied to increase income, decrease import, increase export and to provide employment but we cannot see these things in this taxation bill.”

He said in order to reduce poverty roads are very important and now that roads are connected everywhere if vehicles are reduced than there is a need for public transport but there are no such plans. “Everybody wants to buy a vehicle and if government could exempt some tax for first time buyers than people can afford to buy it otherwise when there is an increase in taxation low income group cannot afford to buy vehicle,” Zimba said.

He said importing electric vehicles is a good idea but the country’s road conditions especially in rural areas would not support electric vehicles.

Drametse Ngatshang MP, Ugyen Wangdi said, “Vehicles like bolero are also highly taxed but this vehicle is mainly used in the rural areas so people would not be able to afford them.”

“In some advance countries with environmental issues green tax makes sense but when it comes to Bhutan, which has a good environment increasing the green tax does not make much sense,” he added.

Lamgong Wangchang MP, Khandu Wangchuk said weather it was increase or decrease in taxation, his party supported it because taxation reduced the gap between rich and poor. He said it will be better if they lift the alcohol; furniture and vehicle ban together and increase the taxes because when alcohol is taxed high it will reduce consumption.

Pangbang MP, Dorji Wangdi said the previous government had banned the import of vehicles due to the rupee crisis but now lifting the ban on vehicles is good as the country’s economy has improved.

He said, “Middle and lower income people cannot afford to buy vehicles when there is an increase in the tax so it will be better if we make available public transport in the 20 dzongkhags.”

MoEA Minister, Norbu Wangchuk disagreed with the Pangbang MP saying that the country’s economy had not improved, as there was unemployment, rupee shortage and a debt problem.

He said, “As India is one of the big trading partner of Bhutan, our trade agreement states that there should not be any restriction on goods and when we discussed with the people, most of them said the ban is not good. The RMA also has no problem with lifting of ban but they have said that there should be a strong taxation policy in the country.”

He said, “When there is an increase in taxes there will be some problem for the people but everybody also knows about our country’s economy situation.”

He said taxation was kept same as before on electric vehicles (EVs) as to encourage the use of EVs in the country. He said the government is thinking of importing second hand EV which has travel 30,000 km as EVs do not pollute the environment and is cheaper to buy and use as taxis.

Opposition leader, Pema Jamtsho said it is important to tax EVs which would use parking space and will also lead to traffic problems.

Bartsham MP, Wangdi Norbu said when there is high tax on utility vehicles the middle income group cannot afford to buy it.

MoHCA Minister, Damcho Dorji said that EVs are already expensive and if it is taxed than people would not be able to buy the vehicle.

“When we import other utility vehicles our money goes out as we have to buy fuel but EVs only require electric power. Rural people mostly use alto, Marti vans and other small vehicles and so if these vehicles can travel in rural areas so can EVs,” said the minister.

PM, Tshering Tobgay said, “Many concerns have been expressed about EVs and that it cannot be used in our country but when it comes to taxation many MP feel it should levied with some taxes but we request the opposition not to levy tax on EVs. If there is a space problem in traffic than we should levy tax for EVs but as of today we have only a limited number of EVs.”

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