The Bhutanese Leading the way.
The Member of Parliament (MP) of Gangzur Minjey Constituency, Loday Tsheten, has called for Amendments to the Property Tax Act of Bhutan 2022, focusing on the tax concessions for Kamzhing and Chhuzhing.
Under the Act, Chhuzing receives a 90% tax concession, while Kamzhing is given a 50% concession. The problem, according to the MP, is that these concessions do not consider the differences in land size or quality.
Some landowners with small plots of Kamzhing or Chhuzhing are unfairly taxed at a higher rate compared to those with larger plots.
Another issue raised was the method used to classify land in Chiwogs.
The current system calculates land values based on straight-line distances from municipal boundaries, but this method does not reflect the actual distance one would travel by road or foot. He stated, “This defies the Principle of Equality.”
As a result, land located farther from the municipality may be undervalued, degrading its actual worth and violating the principle of equality in taxation.
Additionally, the MP highlighted the problems of landowners who have contributed private land for the construction of farm roads in their communities.
These landowners are still being taxed for land that they contributed and is no longer usable for cultivation.
Despite providing land for public infrastructure, they receive no compensation, and their land records are not updated to reflect these changes so they have to pay taxes for these lands.
He states that this is not only unfair, but also goes against the principles of justice and equity.
In light of these issues, the Gangzur Minjey MP has proposed three key recommendations.
Firstly, to amend the Property Tax Act to provide equal 90% concessions for both Chhuzing and Kamzhing land.
Secondly, to revise the land classification system to more accurately reflect the true value of the land, and lastly, to exempt land given for public purposes, such as farm roads, from taxation, and ensure that land records are updated to reflect these contributions.
The Finance Minister informed the house that a special committee led by the Land Secretary is already looking at the above and other issues.
The motion was passed with all the members voting for amendments for the Kamzhing and Chhuzhing tax concessions.
The NA Deputy Speaker, Sangay Khandu stated, “The proposal is expected to be debated in the next session of the National Assembly if there are still issues surrounding the aforementioned taxes.
