NA passes Tax Bill, almost 95% of the proposed tax hike terminated

The government proposal to raise taxes on various items was stripped down to just ‘green tax’ which will be levied only on vehicles.

In a session where NA MPs slammed all the specified sections in the tax bill, finance minister Wangdi Norbu said the tax hike would have never been proposed had it not been for the Indian Rupee (INR) shortfall.

He said, it is the responsibility of the government to take care of fiscal policies by increasing taxes in times of excessive imports and lower taxes when imports are less.

He said the government needs to wait for parliamentary sessions for such fiscal measures to be implemented. “Only a small part is left of what I proposed,” he said.

The amended tax bill was endorsed by NA through secret ballot with 40 members present excluding the speaker. 33 members voted for the bill, four voted against it while three abstained from voting.

The green tax which was proposed to be levied on vehicles, fuels, refrigerators and air conditioners among others has also been amended by the house. The proposed increase by 40% on vehicle tax with engine capacities of 1,800 cc and above has been slashed down to 20% and 5% on vehicles of lower capacity. Green tax on other proposed items including fuel, lubricants and LPG has now been excluded from the bill.

This is in addition to the existing 40- 45 % sales tax and customs duty on the same categories of vehicles, taking the total tax to 65% for vehicles above 1,800 cc and 45% for vehicles below 1,800 cc.

Vehicles above 1,800cc include Toyota Land Cruisers, Honda CRVs and Hyundai brands of Santa Fe and Tucson while Maruti 800, Alto, Hyundai santro xing and the likes come under vehicles of engine capacity below 1,800 cc.

Of the few, Paro MP Chencho Dorji was the first to oppose the green tax proposed in the bill, requesting it to be applicable only to vehicles and to further decrease the percentage on it. He said the projected tax hike on vehicles was beyond public capacity.

He also suggested that the tax proposed on meat, egg and fish was not reasonable or logical. He said, “our poor farmers cannot afford fresh meat for consumption and is mostly dependent on substitutes like dry fish and eggs”.

A tax proposed to be levied on silk fabrics has also been removed from the bill as suggested by several members. Punakha MP Tshering Penjor said the national dress is an important aspect of Bhutanese culture and citizens should be able to afford it. “Textile is already expensive and taxes will make it worse for the poor,” he said.

Excavators, ferry trucks and earthmoving equipments though not included in the proposed bill has been excluded from green tax by the NA along with the proposed utility vehicles such as buses used for general public, pick-ups and trucks used on rural roads.

However, many MPs are alleged to own earthmoving equipments leased out to hydropower projects in the country.

Dagana MP Sonam Jamtsho was one among many who said the proposed tax hike on items such as furniture, fuel, LPG and others except alcohol is an additional burden on the middle income group. He said it is as if, the government is forcing excess load on citizens beyond their capacity.

Bumthang MP Karma Wangchuck said the country’s population divided into less people who can afford a tax hike while a larger section of the nation cannot afford it. However, like almost all the MPs who expressed support in the assembly, he said it was reasonable to levy tax on alcohol and vehicle tax.

Among all the MPs who expressed views on the tax bill in assembly, the NA speaker Jigme Tshultim was the lone member who was against the proposed tax on alcohol. Maximum members encouraged tax hike while some suggested complete ban on alcohol. However, the house concluded that taxes on alcohol shall remain without any change and the proposed hike has been called off.

Trashiyangtse MP Kesang Wangdi who was skeptical of the green tax said levying taxes on vehicles above 1,800 cc will not help in conserving environment and suggested that all types of vehicles be included with a minimum tax.

Gasa MP Damcho Dorji said there is no need for green tax for now as Bhutan’s pollution level is low and is recognized internationally. Fuel and gas, he said are items which are provided to the public on subsidized rates by the government. “It doesn’t make sense if taxes are to be levied on the same subsidized items,” he said.

He said the government seems to be picking on frogs out of fishes aplenty to tax, criticizing the proposal to levy tax on import of power chainsaw. He added that power chainsaw isn’t used by urban people but by farmers and lumberjacks. If it has been deemed harmful for the environment there are laws that protect it, for the chainsaw doesn’t have the ability to cut down trees unless someone uses it to-do so.

Increasing taxes in a move to address the current economic situation he said is a “pathetic” measure.

Speaking on behalf of the government, works and human settlement minister Yeshey Zimba said the government has never levied taxes beyond public’s capacity despite providing much basic facilities in villages.

 

About Minjur Dorji

11 comments

  1. Now the law makers are getting mad. They dont know what they were doing. Once they end up saying that 40% green tax is final another day its just opposite. One day they might put tax on horses and cows too get their time passes in the National Assembly session.
    Before most of the law makers are uneducuated but the charm in NA Hall is different. I remember the debates made by Haa MP Nob Tsering, Wangdue Mp Sigay and Samtse MP Sangay Khandu n so on. They are much more better than todays one. Their words have weight.

  2. what is the agenda for increasing vehicle tax, to solve pollution or parking space,, this tax increase will be likely to have less impact on that,,, infact more small cars/indian cars will  be flooded in the market, which will put pressure on INR and less foreign cars will be sold.

    another impact would be more second and third and fourth and so on foreign cars will be traded contributing to the pollution. Rich can buy, no problem, but poor will buy on secondary market.

  3. hahahaha…our goverment has been worried by the foreign aids withdrawals but at the same time they are afraid of taxing the luxurious goods . more over our health minister has been shouting about ill effects of alcohol but now they dont want to tax it. this shows that our people’s representatives did not know what they were discussing.

    In this situation when is our current expenditure going to be met by internal revenue. the policies makers need to be realistic and think beyond 5 years of their term.

  4. wish the govt spent sometime doing proper home work instead of, as always, only coining attractive levels like GREEN TAX!!!!!!!!!!

  5. The main agenda for only taking the vehicle tax, among bunch of proposed tax is Just because of DPT loosing the case last year to Opposition. Keeping the grudges in mind they only raised the vehicle tax.
    I personally dont see any point in imposing green tax, if that is just to solve the problem of Rupee Crunch.
    If the NA has raised tax on alcohol that makes more sense.
    Why was the Alcohol tax dropped by National Speaker? Does he has the power to do that or is it because most of his relatives were involved in the business?
    No regret in Speaker putting up his resignation, In fact the deputy speaker Yangku Sharpa is far better than him. So please Get lost from the post.

  6. Looks like the Honourable Speaker wanted to resign becoming an alcoholic. He is the lone person in the assembly who haven’t recognized the importance of taxing alcohol. I feel he dont have the right to decide things like that as mentioned by OL. I never thought that Bhutan’s first democratically elected speaker would turn out to be such a controversial figure :-(.

  7. Ha ha no tax on excavator and trippers lo. And they proposed to tax a power chain. I can not wait till 2013 ya.
    You know guys why they droped tax on excavators and trippers?????
    Please think 100 times before you vote next time la.

  8. If one thing was to be changed, it’s the mentality of our society. I suggest all responsible voters to look for the wealth of each candidate: if the contestant is wealthy no vote please!
    If the contestant is aged: no vote please
    If the contestent is culturalist: no, not, never.
    Women did not say anything good in the parlaiment, yet there are chances someone good may come.
    The answer why the tax was not levied on earth movers, trucks and trippers is because all the parlaimentrains have rented their vehicles to hydropower projects, the vehicles there recieve abnormal rate, thousands of such vehicles are expected to enter Bhutan before 2013, all belonging to the family of parlaimentrains.
    Why do we entertain these crisis which begin is in parlaiment? Had all this parlaimentrains been poor and young there are possibilities not only to ease the rupee crisis, but to have excess of it. That would hardly be touching tax revision.
    If not for culturalists, we would not uproot and throw hemp (but extract fibres from it) nor have heavy tax on consumption of alcohol or tobacco.
    Economist are of dire need in the parlaiments, does this government know the longterm effect of raising tax? It results in the loss of value of money, aka inflation. Does anyone know what happens if the loans are shut? Shit on their face; it causes the economy to slowdown.
    Does anyone in the government know what is the effect of leasing five mines at one go? Do hell with Thinley’s government, we are degrading our own morality, where is the sustainability? next they will sell our labour force to Australia or England to fight Rupee crisis( through BPO), we understand such stand for such cynical nude brained politicians. I dont accept that current politicians (including revered, honourable Sri Sri sri sri Lyonchen) is even knows anything about national issues. No wonder a 20 year child will have better analytical abilities than any bhutanese politicians today, except for their salaries they did nothing good. Who will talk about census issues? Land scandals? Corruption in hydropower projects?.
    Come 2013 and we are saved.

  9. Thanks for reminding, the reason why the MP’s did not impose tax on the Heavy earth moving and Trucks. That is because Mp’s Like Tshering penjor has hired them to Punatshangchu Project.

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