The Bhutanese Leading the way.
After two days of thorough deliberations in the National Assembly (NA) on 16 and 17November, the House finally adopted the Tax Bill of Bhutan 2022.
With the Finance Minister moving the motion to adopt the Bill, it was passed with 45 Yes and 1 Abstain votes from the 46 members present.
The Act comes into force on the day the Bill was introduced to the National Assembly (NA) by the Finance Minister, which was on 8 November 2022.
The Act will amend the Bhutan Trade Classification and Tariff Schedule 2022 and the Act will supersede all laws, rules and regulations, notifications, and circulars that are inconsistent with the provisions of the Act.
The Act addresses the inflationary pressure on the essential food items, and to ensure adequate food supply and nutrition security, discerning consumerism of harmful products to curtail damage to health, economy, and environment, and considering the importance to support the development of priority local industries, the Act will amend the BTC code, Commodity Description, Customs Duty rate, Sales Tax rate, and Green Tax rate of the goods classified under Bhutan Trade Classification and Tariff Schedule 2022.
Through a majority show of hands two of the recommendations of the Economic and Finance Committee (EFC) was adopted. The House supported the committee’s recommendation to increase Sales Tax (ST) on cement to 30 percent.
The NA voted to support the EFC proposal to increase the ST on eggs to 50 percent after the Agriculture Minister stated that Bhutan has more than enough eggs.
The proposed 40 percent raise on imported pork and chicken, and all processed products was rejected. Majority voted to keep the 20 percent ST on chicken and pork products. The NA also narrowly voted to not increase the tax on milk and cream.
NA also rejected the increase of ST on dairy products, and voted not to increase the tax on dairy items like butter, cheese and curd from ST 10 percent to ST 50 percent.
NA also rejected the decrease of tobacco’s ST of 50 percent, and kept it at 100 percent by a narrow margin.
NA rejected the ST on grill and netting and rejected the 50 percent ST on furniture.
The House unanimously supported the government’s proposal to levy Green Tax on selective machineries that have emissions.
The House approved the revised tax rates that the government had proposed for the remaining commodities including plastics, gold and silver, heavy machinery, and wood and metal furniture.
The Bill will be forwarded to the National Council of Bhutan.
