The Bhutanese Leading the way.
The National Council (NC) endorsed significant recommendations to the Income Tax Bill, increasing exemption limits for non-business individuals on 24th June.
One key recommendation is to exempt up to Nu 400,000 per income year on interest earned from fixed deposits. Additionally, the NC recommended the exemption cap for dividend income to Nu 200,000 per income year for individuals.
These changes go beyond the National Assembly’s (NA) earlier decision, which had set a Nu 300,000 exemption ceiling for both interest and dividend income.
The Income Tax Bill was adopted by the NC with 21 members voting in favor and two abstaining out of the 23 present. NC also recommended increasing the interest rate on delayed tax refunds from 5 percent to 15 percent per annum. This change would amend Section 515 of the existing law, which currently mandates a 5 percent interest rate on late refunds under Section 513(3), effective from the due date until payment.
Regarding the Excise Tax Bill, the NC approved a 100 percent tax on electronic cigarettes and similar personal vaping devices, diverging from the NA’s earlier proposal of a 20 percent tax on such items. It also endorsed a zero percent tax rate for firefighting vehicles in recognition of their emergency role.
The Excise Tax Bill passed unanimously with 23 members present voting in favor. NC also recommended that the commencement date for both Bills be set as the date they were first introduced in NA as per Section 46B of the Public Finance (Amendment) Act 2012.
The two Bills will now return to NA for re-deliberation.
