Agriculture Minister Yeshey Penjor

Parliament reduces property tax on cultivated Kamzhing land by 50% and passes the Property Tax Bill

In what will come as a major relief for people in rural areas the National Assembly accepted the National Council proposal to reduce the 0.1% land tax on Kamzhing land (dry land) by 50% if it is under cultivation.

Chuzing or wet land had already been granted a 90% tax reduction.

The NA rejected the NC proposal to make land taxes 0.075% instead of 0.1%.

The NA also rejected to reduce tax concession on highland down to 95% including Tsamdro from the 90% already proposed by the NA.

The NA, rejected the NC proposal to do away with the section 57 which says, ‘Lhengye Zhungtshog may, on the joint recommendation of the Ministry of Finance, Ministry responsible for human settlement and the National Land Commission Secretariat, where it is just and equitable to do so, prescribe in the Rules made under this Act that the tax payable in respect of such category of land or buildings for such period shall be remitted wholly or in part and prescribe the applicable conditions for such remission.’

While some MPs felt it should be left to the Parliament to make exceptions and can result in favors being given the majority felt that the government must be given a provision like this to help people who can genuinely cannot pay land taxes.

The NA also rejected the NC proposal stating that an appeal committee must pass its decision with 15 days from receipt of an appeal and appeal must be within 15 days after the decision. Both were kept at 30 days as originally passed by the NA.

The NA then with a majority passed the Bill. Given that it is a money bill it does not have to go for joint sitting.

The Bill will be sent for Royal Assent.

The Bill brings about value based tax with the value being decided based on the increased PAVA rates. The Bill will mean much higher land taxes for places like Thimphu, Phuentsholing and Paro where land value is very high.

The Bill also increased the taxes in rural areas in a value based manner from the earlier Nu 12 per acre for Kamzhing and Nu 24 per acre for Chuzing, but the 50% and 90% tax concessions will give relief.

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